How self-employment tax works in 2026

If you're a 1099 freelancer or independent contractor, you don't have an employer splitting your Social Security and Medicare taxes with you — you pay both halves yourself, called self-employment (SE) tax. For 2026, the combined rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare.

SE tax isn't calculated on your full net profit — it's calculated on 92.35% of it, a long-standing adjustment that roughly accounts for the fact that a traditional employer's share of FICA isn't itself subject to FICA.

The Social Security portion has a cap: for 2026, only the first $184,500 of combined wages and net SE earnings is subject to the 12.4% rate. The Medicare portion has no cap — every dollar of net SE earnings owes the 2.9% Medicare tax, and earnings above $200,000 (single) / $250,000 (married filing jointly) owe an additional 0.9% Medicare tax on top.

Half of your SE tax is deductible above the line on your federal return, which lowers your adjusted gross income (though it doesn't reduce the SE tax itself).

Need the full picture, including federal income tax and quarterly payments? Use the full 1099 Quarterly Tax Calculator.

Sources

  • IRS — Self-Employment Tax (Topic 554) & Schedule SE instructions
  • SSA.gov — 2026 Contribution and Benefit Base ($184,500)
  • IRS — Topic 751 / Form 8959 (Additional Medicare Tax)