Last updated: April 2026 · Reviewed by Alex Morgan, CFP

Self-Employment Tax Calculator 2026 — SE Tax, QBI & Quarterly Payments

When you work for yourself, you are both the employee and the employer — which means you pay both halves of Social Security and Medicare taxes. This calculator computes your 2026 self-employment (SE) tax at the 15.3% combined rate, the above-the-line deduction for half your SE tax, the Section 199A QBI deduction (if eligible), and your estimated quarterly payment amount. Enter your net self-employment earnings (revenue minus deductible business expenses) to get started.

Step-by-step calculation:
Net SE earnings:              $60,000.00
× 0.9235 multiplier:          $55,410.00

Social Security (12.4%):
  SS cap remaining:           $184,500.00
  SS taxable amount:          $55,410.00
  SS tax:                     $6,870.84

Medicare (2.9%):
  Medicare tax:               $1,606.89

Total SE tax:                 $8,477.73
Half SE tax deduction:        $4,238.87
QBI deduction (20%)*:         $11,152.23
Quarterly est. payment:       $2,119.43
Effective SE rate:            14.13%

The Structure of SE Tax

Self-employment tax is the self-employed person's equivalent of FICA (Federal Insurance Contributions Act) taxes. When you are an employee, your employer pays half of FICA and you pay the other half through payroll withholding. As a sole proprietor, freelancer, or independent contractor you pay the entire amount yourself. For 2026, the combined SE tax rate is 15.3%, broken into three components:

The Social Security cap of $184,500 for 2026 is important if you also have W-2 income. Social Security taxes from your employer on W-2 wages count toward this limit. If your W-2 Box 3 wages already exceed $184,500, you owe no Social Security portion of SE tax at all — only the 2.9% Medicare component (plus any Additional Medicare Tax above the thresholds).

The 92.35% Multiplier Explained

The IRS does not apply SE tax to your full net self-employment earnings. Instead, it first reduces your SE income by the employer-equivalent half of the SE tax itself. The mechanics work like this:

• The "employer half" of FICA is 7.65% of gross wages (6.2% SS + 1.45% Medicare)
• Self-employed individuals deduct this equivalent before computing SE tax
• Result: SE tax = net earnings × (1 − 0.0765) × 15.3% = net earnings × 0.9235 × 15.3%

This prevents self-employed people from paying SE tax on the portion of income that represents the employer's share of FICA — the same income that employees never see taxed at all. The multiplier of 0.9235 is fixed; it is not affected by your actual income level.

For $60,000 of net SE earnings: $60,000 × 0.9235 = $55,410 of taxable SE income. Social Security (12.4%) on $55,410 = $6,871. Medicare (2.9%) on $55,410 = $1,607. Total = $8,478.

Half SE Tax Is Deductible

After you compute your SE tax, you may deduct exactly one-half of it as an above-the-line adjustment to income on Schedule 1, Line 15 of Form 1040. This reduces your Adjusted Gross Income (AGI), which in turn lowers your federal income tax bill. The deduction does not reduce the SE tax itself — it only reduces regular income tax.

For a single filer in the 22% bracket with $60,000 of SE income:

• Total SE tax: $8,478 (SS + Medicare, ignoring Additional Medicare)
• Half SE tax deduction: $4,239
• Income tax saved (22% bracket): $4,239 × 22% = $932

This deduction is available regardless of whether you itemize. It does not appear on Schedule C; it is claimed directly on Form 1040 Schedule 1.

Worked Example: $60,000 SE Earnings, Single Filer

Below is the full step-by-step calculation for a single self-employed individual with $60,000 of net earnings, no W-2 wages, and income below the QBI phase-in threshold:

Net SE earnings:                       $60,000.00
× 0.9235 (92.35% multiplier):          $55,410.00

Social Security tax (12.4%):
  SS cap 2026:                         $184,500.00
  W-2 SS wages already earned:              $0.00
  Available SS base:                   $184,500.00
  SS taxable = min($55,410, $184,500): $55,410.00
  SS tax = $55,410 × 0.124:             $6,870.84

Medicare tax (2.9%):
  Medicare = $55,410 × 0.029:           $1,606.89

Additional Medicare tax:
  Combined income = $60,000
  Threshold (single):                  $200,000.00
  Excess over threshold:                    $0.00
  Additional Medicare tax:                  $0.00

Total SE tax = $6,870.84 + $1,606.89:  $8,477.73
Half SE deduction:                     $4,238.87
Effective SE tax rate:                    14.13%

QBI deduction (20% of $60,000 - $4,239): $11,152.20*
Quarterly estimated payment ($8,478 ÷ 4): $2,119.43

QBI Deduction (Section 199A)

The Qualified Business Income (QBI) deduction, introduced by the Tax Cuts and Jobs Act of 2017 and currently effective through 2026, allows most self-employed individuals to deduct up to 20% of their qualified business income from taxable income (not from SE tax). This deduction applies to pass-through entities — sole proprietors, S-corp shareholders, and partnership members.

For 2026, the income phase-in thresholds are:

If your taxable income is below these thresholds, you generally qualify for the full 20% QBI deduction with no further tests. If you are above the threshold, your business type matters:

• Specified Service Trades or Businesses (SSTBs) — law, health, consulting, financial services, brokerage, athletics, performing arts — lose the QBI deduction entirely above the phase-in range.
• Non-SSTBs — retail, manufacturing, real estate, restaurants, technology — may still qualify above the phase-in, but the deduction is limited to 50% of W-2 wages paid, or 25% of W-2 wages plus 2.5% of the unadjusted basis of qualified property (the "W-2/UBIA" test). This calculator uses a simplified approach and shows $0 for high-income filers subject to this test. Consult a CPA for an accurate figure.

QBI is calculated on net business income after the half-SE-tax deduction, since that deduction reduces your "qualified business income." The deduction reduces your income tax but does not reduce self-employment tax.

Quarterly Estimated Tax Payments

Self-employed individuals generally must pay estimated taxes quarterly rather than waiting until the April filing deadline. The IRS charges an underpayment penalty if you do not pay enough throughout the year. The four 2026 due dates are:

To avoid any underpayment penalty, use one of the IRS safe harbor rules:

• Pay at least 90% of your current-year total tax liability, OR
• Pay 100% of last year's tax (110% if your prior-year AGI exceeded $150,000)

Pay online via IRS Direct Pay (free, no registration required) or through the Electronic Federal Tax Payment System (EFTPS). You can also pay by check using Form 1040-ES. Include both your SE tax estimate and regular income tax estimate in each quarterly payment.

Additional Medicare Tax (0.9%)

The Additional Medicare Tax of 0.9% applies to higher earners. Unlike the standard Medicare tax of 2.9%, for which employers match half on W-2 wages, the Additional Medicare Tax has no employer match — self-employed individuals pay the full 0.9% themselves. The tax applies to the amount by which your combined net SE earnings plus any W-2 wages exceed the filing-status threshold:

• Single / Head of Household: $200,000
• Married Filing Jointly: $250,000
• Married Filing Separately: $125,000

If you also have a W-2 employer, they are required to withhold the 0.9% Additional Medicare Tax once your cumulative wages exceed $200,000 in the year — regardless of filing status. If your total combined income (SE + W-2) puts you over the applicable threshold for your filing status, you may owe additional amounts or receive a partial refund when you file, depending on the withholding your employer applied.

Solo 401(k) and SEP IRA Strategies

High-income self-employed individuals have access to retirement accounts that can shelter substantial sums from income tax, though not from self-employment tax (SE tax is calculated on net business income before retirement contributions):

• Solo 401(k): For 2026, you can contribute up to $24,500 as the employee (the same as a standard 401k), plus up to 25% of net SE earnings as the employer contribution, with a combined limit of $72,000 (Section 415(c)). Contributions reduce your taxable income but not your SE tax base.
• SEP IRA: Contribute up to 25% of net SE earnings (after the half-SE deduction), up to $70,000 for 2026. Simpler to administer than a Solo 401(k) but has no Roth option.
• SIMPLE IRA: For businesses with employees, allows up to $16,500 in employee deferrals for 2026, with a required employer match.

Maximizing retirement contributions is one of the most effective ways to reduce your income tax as a self-employed individual. Use our 401(k) calculator to project how these contributions grow over time, and our US income tax calculator to see the combined income tax impact.

Frequently Asked Questions