Estimate the Social Security and Medicare tax on your net self-employment income. The rate is 15.3 percent total, applied to 92.35 percent of net profit.
Educational estimate using 2026 thresholds. Not tax advice.
Self-employment tax applies to 92.35 percent of net profit: 12.4 percent for Social Security (capped at the annual wage base) and 2.9 percent for Medicare. High earners add 0.9 percent above $200,000 (single) or $250,000 (MFJ). Half of the total is deductible against income tax.
Calculate your QBI deduction, check eligibility, and see how the S-corp structure compares for your income level.
A regular employee pays 7.65 percent toward Social Security and Medicare while the employer matches it. Work for yourself and there is no employer, so you cover both sides. That comes to 15.3 percent total: 12.4 percent for Social Security (which stops at the annual wage base) and 2.9 percent for Medicare (which does not stop). High earners add a 0.9 percent Medicare surtax on income above $200,000 single or $250,000 MFJ.
Take $80,000 of net profit. Multiply by 92.35 percent to get $73,880, the taxable base. Social Security on that comes to about $9,161 and Medicare about $2,143, giving a total of roughly $11,304. Half of that ($5,652) is deductible from gross income before calculating income tax. It does not eliminate the bill. It reduces it.
The combined Social Security and Medicare tax (15.3 percent total) paid by self-employed individuals on their net profit. Employees split this with their employer. Self-employed people pay both halves.
No. SE tax applies to 92.35 percent of net profit. The Social Security portion (12.4 percent) also stops once you reach the annual wage base. The Medicare portion (2.9 percent) has no cap.
Yes. One-half of self-employment tax is deductible from gross income before calculating your income tax. This mirrors the employer deduction for payroll taxes.
Yes. Self-employment tax is separate from federal income tax, which applies on top of it. The 1099 tax calculator estimates both together.
No - it’s an estimate. Consult a tax professional.