Self-Employment Tax Calculator
Freelancer & 1099 Tax Estimator ·
Business Income
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Personal Tax Situation
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Enter your self-employment income to calculate SE tax and estimated payments.
Net Income After All Taxes
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after SE tax + federal income tax
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Gross SE Income—
Business Expenses—
Net SE Income—
Self-Employment Tax (15.3%)—
SE Tax Deduction (½)—
QBI Deduction (20%)—
Other Deductions—
Federal Income Tax—
Net Take-Home—
Total Tax Rate (all taxes)—
SE Tax Total
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SS Portion (12.4%)
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Medicare (2.9%)
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Effective Rate
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How Self-Employment Tax Works
When you work for an employer, they pay half of your Social Security and Medicare taxes. When you are self-employed, you pay both halves — a total of 15.3% (12.4% Social Security + 2.9% Medicare) on your net self-employment income. This is called the Self-Employment Tax (SE Tax).
The good news: you can deduct half of your SE tax from your gross income, reducing your federal income tax bill. You also qualify for the Qualified Business Income (QBI) deduction — up to 20% of net business income, a major tax benefit for freelancers and sole proprietors.
Key Numbers for
SE Tax Rate: 15.3%
12.4% Social Security (on net income up to $176,100) + 2.9% Medicare (no cap). Above $200,000, an additional 0.9% Medicare surtax applies. SE tax applies to 92.35% of net self-employment income.
QBI Deduction
Most self-employed filers can deduct up to 20% of qualified business income from taxable income. This is one of the most valuable deductions for freelancers and was introduced by the 2017 Tax Cuts and Jobs Act.
Quarterly Deadlines
If you expect to owe $1,000+ in taxes, you must pay quarterly estimated taxes — April 15, June 16, September 15, and January 15. Missing deadlines triggers underpayment penalties from the IRS.
SEP-IRA Contribution Limit
Up to 25% of net self-employment income, maximum $69,000 in 2026. SEP-IRA contributions are fully deductible and significantly reduce both income tax and SE tax. One of the best tax strategies for high-earning freelancers.
Federal estimate only. State self-employment taxes, AMT, and complex business structures are not included. Consult a CPA or tax professional for complete guidance.
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Frequently Asked Questions
What is the self-employment tax rate for 2026?+
The self-employment tax rate is 15.3% — composed of 12.4% Social Security tax (on net SE income up to $176,100) and 2.9% Medicare (no income cap). However, SE tax is calculated on 92.35% of your net self-employment income, not 100%. This adjustment reflects the fact that employees only pay tax on their take-home pay, not the employer's matching portion. Above $200,000 in net income (single filer), an additional 0.9% Medicare surtax applies.
How do I calculate self-employment tax step by step?+
Step 1: Subtract business expenses from gross income to get net SE income. Step 2: Multiply net SE income by 92.35% to get your SE tax base. Step 3: Multiply by 15.3% to get your SE tax. Step 4: Deduct half of the SE tax from your gross income as an above-the-line deduction. Step 5: Apply the QBI deduction (20% of net business income for most filers). Step 6: Calculate federal income tax on the remaining taxable income. Step 7: Add SE tax + federal income tax for your total tax bill.
When do I need to pay quarterly estimated taxes as a freelancer?+
You must pay quarterly estimated taxes if you expect to owe $1,000 or more in federal taxes for the year. The 2026 due dates are: Q1 — April 15, 2026; Q2 — June 16, 2026; Q3 — September 15, 2026; Q4 — January 15, 2027. Missing these deadlines triggers an underpayment penalty (currently ~8% annualized). You can pay via IRS Direct Pay at irs.gov or through the IRS2Go app. State estimated taxes have separate deadlines.
What business expenses can I deduct as a freelancer?+
Common deductible business expenses: Home office (if used exclusively for business — $5/sq ft simplified method, up to 300 sq ft); equipment and software (computer, phone, subscriptions); professional development (courses, books, conferences); professional services (accountant, lawyer fees); marketing and advertising; business travel (65.5 cents/mile in 2026); health insurance premiums (fully deductible above-the-line); and retirement contributions (SEP-IRA, Solo 401k). Keep receipts and records for all claimed deductions.
What is the QBI deduction and do I qualify?+
The Qualified Business Income (QBI) deduction allows most self-employed individuals to deduct up to 20% of net business income from taxable income — one of the largest tax breaks available to freelancers. Most sole proprietors, LLCs, and S-corp shareholders qualify. The full deduction is available if your total taxable income is below $197,300 (single) or $394,600 (MFJ) in 2026. Above these thresholds, the deduction phases out for certain service businesses (law, consulting, finance). Use Schedule QBI (Form 8995) when filing.
Should I set up an LLC or S-Corp to reduce self-employment tax?+
An S-Corporation election can significantly reduce SE tax for high earners. Instead of paying SE tax on all profits, you pay yourself a "reasonable salary" (subject to payroll taxes) and take the remainder as distributions (not subject to SE tax). At $100,000+ net income, S-Corp savings can exceed $5,000–$10,000 annually. However, S-Corps involve payroll administration, state filing fees, and additional complexity. The break-even point where the savings justify the cost is typically $40,000–$60,000 in net SE income. Consult a CPA before making this decision.
How much should I set aside for taxes as a freelancer?+
A general rule for most freelancers: set aside 25–35% of every payment received for taxes. Specifically: SE tax is approximately 14.1% of net income (15.3% × 92.35%); federal income tax adds another 10–24% depending on your bracket; state income tax adds 0–13% depending on your state. A useful heuristic: save 30% if you're in the 22% federal bracket, 35% if in the 24% bracket. Open a separate savings account and transfer the set-aside amount immediately upon receiving any payment.
What retirement accounts can self-employed people use to reduce taxes?+
SEP-IRA: contribute up to 25% of net SE income, maximum $69,000 in 2026. Simple to set up, fully deductible. Solo 401(k): up to $23,500 as employee contributions plus 25% of net SE income as employer contributions, maximum $69,000 total ($76,500 if age 50+). More complex but higher limits for high earners. SIMPLE IRA: $16,500 employee contribution limit. Both SEP-IRA and Solo 401(k) contributions are fully deductible above-the-line, reducing both federal income tax and self-employment tax base.
Do I need to pay self-employment tax on side income under $400?+
No — you are not required to pay self-employment tax if your net self-employment income is under $400 for the year. However, you still must report all income on your tax return. If your SE income is below $400, you do not need to file Schedule SE. Note that this threshold is per business, not per payer — if you have multiple 1099s that together exceed $400, you must pay SE tax on the combined net income. The $400 threshold has not changed in decades and is not indexed for inflation.
Can I deduct health insurance premiums as a self-employed person?+
Yes — self-employed individuals can deduct 100% of health insurance premiums for themselves, their spouse, and dependents as an above-the-line deduction (directly from gross income, no itemizing required). This includes medical, dental, and long-term care insurance. The deduction cannot exceed your net self-employment income. You cannot take this deduction for any month you were eligible for employer-subsidized health coverage (from your own job or a spouse's employer). This is one of the most valuable deductions available to self-employed workers.