Schedule SE: Self-Employment Tax (2026)
Calculate the 15.3% Social Security and Medicare tax on your self-employment profit.
Schedule SE calculates self-employment tax — 15.3% (12.4% Social Security up to the wage base + 2.9% Medicare) on 92.35% of your net self-employment profit. Half of it is deductible above the line. Because 1099 income has no withholding, you usually pay it in quarterly with Form 1040-ES.
Who files Schedule SE
- Anyone with $400 or more of net self-employment earnings.
- Sole proprietors, 1099 contractors, and single-member LLC owners.
- Partners in a partnership with self-employment income.
- Gig workers whose net profit clears the $400 threshold.
Why self-employment tax exists
W-2 employees split Social Security and Medicare with their employer — 7.65% each. Self-employed people are both employer and employee, so they pay the full 15.3%. Schedule SE applies it to 92.35% of your net profit (the adjustment mirrors the employer-side deduction), caps the 12.4% Social Security portion at the annual wage base, and applies 2.9% Medicare to everything.
The good news: you deduct half of the SE tax as an above-the-line adjustment on Form 1040, which lowers your income tax. Our calculator shows the full breakdown and the deductible half.
How Schedule SE is calculated, line by line
Take $85,000 of net profit from Schedule C line 31, filing single with no W-2 wages. Line 3 carries the $85,000 across. Line 4a multiplies it by 92.35%, giving net earnings from self-employment of $78,497.50 — this is the 7.65% haircut that stands in for the employer-side payroll tax a business would have deducted before paying you.
Line 9 asks how much of those net earnings the 12.4% Social Security rate applies to. With no wages, all $78,497.50 falls under the $184,500 wage base, so line 10 is $78,497.50 × 12.4% = $9,733.69. Line 11 applies 2.9% Medicare to the same $78,497.50 with no cap at all, giving $2,276.43. Line 12 adds them: self-employment tax of $12,010.12. Line 13 halves it — $6,005.06 — and that half becomes an above-the-line deduction on Schedule 1.
One point catches nearly everyone out: the deductible half on line 13 reduces your INCOME tax, not your self-employment tax. Self-employment tax is computed on net earnings before any of it. The same is true of the section 199A deduction and of retirement contributions — all three lower taxable income while leaving line 12 exactly where it was. Only genuine business expenses, which reduce Schedule C net profit before it ever reaches Schedule SE, reduce both.
When you also have a W-2 job — the wage base is shared
The Social Security wage base is ONE annual cap across all your earnings, not one for wages and another for self-employment. Schedule SE lines 8a to 8d exist to enforce this, and getting it wrong is the single most common error in consumer self-employment calculators.
Take $150,000 of W-2 wages plus $80,000 of Schedule C profit. Line 4a gives net earnings of $73,880. Line 8a records the $150,000 of wages already charged against the base; line 8d subtracts them, leaving $184,500 − $150,000 = $34,500 of room. Because that room is SMALLER than the $73,880 of net earnings, line 9 is $34,500, and line 10 charges 12.4% on that alone: $4,278.00. Line 11 still charges 2.9% Medicare on the whole $73,880, because Medicare has no cap: $2,142.52. Total self-employment tax on line 12: $6,420.52.
A calculator that caps self-employment earnings at the wage base while ignoring your wages would charge 12.4% on the full $73,880 and report $11,303.64 — an overcharge of $4,883.12 on this one return.
The Additional Medicare Tax is NOT on Schedule SE
The 0.9% Additional Medicare Tax is calculated on Form 8959, not on Schedule SE, and it is not part of the line 12 figure. It is easy to miss precisely because it lives on a different form, and it works in the opposite direction to the wage base: instead of wages using up an allowance, wages and self-employment earnings are ADDED TOGETHER against a single threshold.
Continuing the same return — $150,000 of W-2 wages and $73,880 of net self-employment earnings, filing single:
- Combined wages and net self-employment earnings: $150,000 + $73,880 = $223,880
- Additional Medicare Tax threshold for a single filer: $200,000
- Excess over the threshold: $223,880 − $200,000 = $23,880
- Additional Medicare Tax at 0.9% (Form 8959): $23,880 × 0.9% = $214.92
- Schedule SE line 12 ($6,420.52) plus Form 8959 ($214.92) = $6,635.44 of total self-employment and Medicare surtax
Additional Medicare thresholds by filing status
The threshold is statutory and is NOT indexed for inflation — it has been the same since 2013. Married filing separately is half the joint figure, which is the case a calculator that collapses filing statuses gets wrong.
- Single and head of household: $200,000
- Married filing jointly: $250,000
- Married filing separately: $125,000
- On a joint return the threshold applies to the couple's COMBINED wages and self-employment earnings, so two earners each under $200,000 can still owe it.
- Employers must withhold the 0.9% once wages pass $200,000, regardless of filing status, so a joint filer can be over-withheld and a married-filing-separately filer under-withheld. Form 8959 settles the difference on the return.
Pairing with quarterly payments (Form 1040-ES)
Because no one withholds tax from 1099 income, the IRS expects you to pre-pay income tax and SE tax in four quarterly installments using Form 1040-ES. Miss them and you can owe an underpayment penalty even if you pay in full by April. The safe-harbor planner helps you size each payment so you avoid penalties.
Frequently asked questions
How much is self-employment tax?
15.3% on 92.35% of your net profit — 12.4% Social Security up to the annual wage base plus 2.9% Medicare with no cap. Higher earners also pay an extra 0.9% Medicare surtax.
Do I pay SE tax and income tax?
Yes, both. SE tax funds Social Security and Medicare; income tax is separate and based on your total taxable income. That's why setting aside 25–30% of 1099 profit is a common rule of thumb.
When do I have to file Schedule SE?
When your net self-employment earnings are $400 or more for the year.
How do I lower my SE tax?
Maximize legitimate Schedule C deductions to reduce net profit, and at higher incomes consider an S-corp election, which can shift some profit out of SE tax. Compare with our LLC/S-corp calculator.
Sources & verification
Last reviewed July 12, 2026.