Freelancers pay both halves of FICA. Enter your net business profit and any W-2 wages, and this calculator computes the 2026 self-employment tax: the 12.4 percent Social Security piece up to the shared wage base, the uncapped 2.9 percent Medicare piece, the extra 0.9 percent at high income, and the half-deduction that claws some of it back.
An employee looking at a paycheck sees 7.65 percent disappear for FICA and rarely thinks about the second 7.65 percent, which the employer pays quietly on top. Together those halves fund Social Security at 12.4 percent and Medicare at 2.9 percent, for a full 15.3 percent price on the employment relationship. When you work for yourself, nobody withholds anything and nobody pays the employer half, so both halves land on Schedule SE under your signature. That is the entire story of self-employment tax: same 15.3 percent, no one to split it with.
The tax applies to net earnings from self-employment, which means business profit after expenses on Schedule C, and it triggers at 400 dollars of net earnings for the year. It sits on top of federal income tax rather than inside it, which is the part that ambushes first-year freelancers. A person earning 75,000 dollars of net profit owes income tax in the low twenties as a marginal rate and another 10,597.16 dollars of SE tax underneath it. Budgeting for one without the other is the classic first-year mistake, and it is why the standard advice is to set aside a quarter to a third of every client payment.
One consolation is structural. The employer half of FICA is a cost of employing you, and economic research across the spectrum finds it is mostly recovered from wages in the long run. In that sense the self-employed person paying both halves and the employee paying one visible half are closer than the sticker numbers suggest. What actually separates them is the package around the tax: the freelancer also buys health insurance, funds retirement without a match, and takes unpaid time off, all without an employer subsidy.
Variables in plain terms. Net profit is Schedule C revenue minus expenses, and the calculator expects the after-expense number. The 0.9235 factor is one minus 7.65 percent: the law lets you deduct the employer-equivalent half, and applying that deduction first means you are not taxed on the money the deduction recovers, so the factor is the elegant way to prevent circularity. The 184,500 dollar Social Security wage base for 2026 is shared between W-2 wages and the SE base, which is why the calculator asks for wages; payroll has usually already consumed part of the cap. The additional 0.9 percent Medicare tax lives on Form 8959 and uses combined income, with the threshold reduced by wages. Thresholds are 200,000 dollars single, 250,000 married joint, 125,000 married separate.
Take the single freelancer with 75,000 dollars of net profit and no wages. The SE base is 69,262.50 dollars. That amount sits entirely under the wage base, so the Social Security piece is 69,262.50 × 12.4% = 8,588.55 dollars, and the Medicare piece is 69,262.50 × 2.9% = 2,008.61 dollars. Total SE tax: 10,597.16 dollars, or 14.13 percent of net profit. The half-deduction is 5,298.58 dollars, which at a 22 percent marginal rate saves about 1,166 dollars of income tax. Setting aside the SE tax alone, roughly 2,649 dollars per quarter belongs in an estimated payment.
Why 14.13 percent and not 15.3? The 0.9235 factor converts the full 15.3 percent into 14.13 percent of every uncapped dollar: 11.45 percent Social Security plus 2.68 percent Medicare. Below the cap every additional dollar of profit carries exactly that rate, which makes the SE tax the single largest tax line for most middle-income freelancers, larger than their federal income tax at the margin.
The same model run across situations shows which rule does the work. Each row changes one thing from the default.
| Scenario | SE tax | Effective on net |
|---|---|---|
| Default: single, $75k net profit, no wages | $10,597.16 | 14.13% |
| Same, but $3,000 net profit | $423.89 | 14.13% |
| Same, but $300 net profit (below $400 trigger) | $0.00 | 0% |
| Single, $150k W-2 wages + $60k net profit | $5,933.58 | 9.89% |
| Single, $220k net profit, no wages | $28,798.46 | 13.09% |
| Married joint, $100k wages + $100k net profit | $13,156.15 | 13.16% |
Three rows deserve a pause. The 150,000-dollar wage row is the most valuable insight for side-hustlers: wages already consumed 150,000 of the 184,500 dollar Social Security cap, leaving 34,500 dollars of room, so only that slice of the 55,410 dollar SE base pays 12.4 percent, and the effective rate on the side income falls to 9.89 percent. The extra 0.9 percent Medicare tax also wakes up here, adding 48.69 dollars on the income above the 200,000 dollar combined threshold. The 220,000-dollar row shows the opposite end: the Social Security piece stops at 22,878.00 dollars once the cap is crossed, so dollars of profit past that point carry only the 2.9 percent Medicare piece plus, past 200,000 dollars, the 0.9 percent surcharge, which is why the effective rate sags from 14.13 to 13.09 percent. And the 300-dollar row shows the trigger working in your favor: below 400 dollars of net earnings, Schedule SE does not apply at all.
The married joint row shows the cap behaving at the household level. One spouse's 100,000 dollars of wages plus the other's 92,350 dollar SE base share the 184,500 dollar cap, so 84,500 dollars of the base pays the Social Security piece and 10,478.00 dollars of the 13,156.15 dollar total comes from that piece alone. Filing separately narrows the cap-sharing and the Medicare thresholds, which is why it rarely helps a two-earner household.
Nothing withholds SE tax, so the IRS wants it in four installments on Form 1040-ES, due April 15, June 15, September 15, and January 15. Miss them badly enough and an underpayment penalty attaches, computed form-by-form on Schedule AI territory, though the safe harbor of paying 90 percent of this year's tax or 100 percent of last year's, whichever is smaller, provides the escape hatch. A practical system: each time a client pays you, move 15 percent for SE tax and your marginal bracket for income tax into a separate account, and the quarterly deadline becomes a transfer, not a crisis.
The half-deduction is the built-in consolation. One half of the SE tax, 5,298.58 dollars in the default example, deducts above the line on Schedule 1, available whether or not you itemize, and it lowers AGI enough to matter for IRA deduction eligibility and other phase-outs. Where SE tax does not flow into: it is not deductible further, and the additional Medicare tax is never deductible at all.
To fold this into the full-year picture, the tax refund estimator combines SE income with wages, withholding, and credits on one 1040, which is where a refund or a balance due actually gets decided. The effective tax rate calculator shows the blended percentage across income tax and FICA, useful for comparing a freelance offer against a salaried one. And the take-home pay calculator shows what the W-2 side of the comparison nets after its 7.65 percent employee FICA, completing the apples-to-apples view.
Because the tax is computed on 92.35 percent of net earnings, not the full amount. Schedule SE multiplies net profit by 0.9235, which equals one minus 7.65 percent, the employer half of the tax. That adjustment exists so the half you are allowed to deduct is not itself taxed. On uncapped earnings the result is 14.13 percent of every dollar of net profit: 11.45 percent for Social Security and 2.68 percent for Medicare.
Net earnings from self-employment of 400 dollars or more in the year, per IRS Schedule SE instructions. Net earnings are business profit after ordinary and necessary expenses, computed on Schedule C. Below the 400 dollar line no SE tax is due at all, though the income still belongs on your 1040. Church employee income has a separate 108.28 dollar threshold. Note the trigger is net earnings, not gross receipts: a side gig that collects 5,000 dollars but spends 4,900 dollars doing it has 100 dollars of net earnings and owes no SE tax.
Yes, and this is the most common way freelancers overpay. Social Security wages from employers and your SE base share one 184,500 dollar cap for 2026. Your employer's payroll already withheld 6.2 percent on everything it paid you, so only the leftover room is taxed at 12.4 percent. In the example on this page, 150,000 dollars of wages leaves 34,500 dollars of room, so only that slice of the side business pays the Social Security portion. Medicare has no cap, so all of the SE base still pays 2.9 percent.
The law lets you deduct one half of your self-employment tax as an above-the-line adjustment, the same way an employer's share of FICA is a business expense. On the default example the deduction is 5,298.58 dollars. It is an adjustment to income, not an itemized deduction, so it works even if you take the standard deduction and lowers AGI, which feeds into other phase-outs. At a 22 percent marginal rate it saves about 1,166 dollars of income tax.
Through quarterly estimated tax payments, due April 15, June 15, September 15, and January 15 of the following year. There is no employer to withhold it, so the payments come out of your own account on Form 1040-ES. Each payment should cover your share of SE tax plus federal income tax for the quarter. The safe-harbor rule protects you from underpayment penalties if you pay at least 90 percent of the current year's tax or 100 percent of last year's, whichever is smaller. Many freelancers set aside 25 to 30 percent of each payment they receive.
Economists across the political spectrum generally agree it does. The employer's 7.65 percent is a cost of employing you, and studies find it is largely offset in cash wages over time. A self-employed person paying 14.13 percent of net profit and a W-2 employee paying 7.65 percent visible FICA are closer than the sticker numbers suggest. The genuinely worse part of self-employment is not the rate, it is that you also carry your own health insurance, retirement plan, and paid time off without an employer subsidy.
All calculation logic on this page is implemented from the primary documents below. Each one is listed with the figure it supplies, so any rate or threshold in the result can be traced back to its published source.
Current-year brackets and withholding rules, with the source named.