How is self-employment tax calculated?

Self-employment tax is 15.3% on 92.35% of your net self-employment income (gross income minus business expenses). The 92.35% factor accounts for the fact that employees only pay half of FICA — self-employed individuals pay both the employer and employee shares. Social Security (12.4%) applies to the first $184,500 of net SE income in 2026; Medicare (2.9%) applies to all net SE income.

Can I deduct self-employment tax?

Yes. You can deduct 50% of your self-employment tax as an above-the-line deduction on your federal income tax return (Schedule 1, line 15). This reduces your adjusted gross income (AGI) and therefore your income tax — but does not reduce your SE tax itself.

What is the QBI deduction for self-employed people?

The Qualified Business Income (QBI) deduction lets most self-employed individuals deduct up to 20% of their qualified business income from their taxable income. It phases out for specified service businesses above $197,300 (single) and $394,600 (married) in 2026. The deduction does not reduce self-employment tax — only income tax.

How much should I set aside for self-employment taxes?

A common rule of thumb is to set aside 25–30% of your net self-employment income for taxes, covering both self-employment tax and income tax. Higher earners or those in high-tax states should use the higher end of that range. Use this calculator for a more precise estimate based on your actual income and filing status.

When are self-employment tax payments due?

Self-employed individuals typically pay estimated taxes four times per year: April 15 (Q1), June 15 (Q2), September 15 (Q3), and January 15 of the following year (Q4). Underpayment penalties apply if you pay less than 90% of the current year's tax or 100% of last year's tax.

Self-Employment Tax Calculator

Self-employed individuals pay 15.3% SE tax on 92.35% of net income — and combined with federal income tax, roughly 25–30% of gross income goes to taxes. Enter your net income and filing status to calculate your exact liability and quarterly payment schedule.

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Your Income Details

Gross Self-Employment Income

Total revenue before any deductions

Business Expenses / Deductions

Home office, equipment, mileage, software, etc.

Filing Status

Other W-2 / Household Income

Spouse's income, part-time W-2 wages, etc. Used to calculate marginal income tax rate.

Your Tax Estimate

SE Tax

Income Tax

Total Tax

Quarterly Est. Payment

Component	Amount	Rate
Gross Income	-	—
Business Expenses	-	—
Net SE Income	-	—
Social Security (12.4%)	-	12.4%
Medicare (2.9%)	-	2.9%
Additional Medicare (0.9%)	-	0.9%
SE Tax Total	-	15.3%
SE Tax Deduction (50%)	-	50%
QBI Deduction (20%)	-	20%
Income Tax (Est.)	-	—
Total Tax Burden	-	—

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Self-Employed vs W-2 Employee: Tax Comparison

As a self-employed person, you pay both halves of FICA (15.3% vs 7.65% for W-2 employees). However, deductions for SE tax, QBI, and business expenses can narrow the gap significantly.

Self-Employed Advantages

✓ Deduct business expenses before calculating taxes
✓ QBI deduction reduces taxable income by up to 20%
✓ Self-employed health insurance premiums are deductible
✓ SEP-IRA allows up to 25% of net SE income (max $70,000) in pre-tax retirement savings

W-2 Employee Advantages

✓ Employer pays half of FICA (saves ~7.65% on taxes)
✓ Pre-tax benefits (health, dental, vision, FSA) reduce taxable income
✓ Employer may match 401(k) contributions
✓ No quarterly estimated tax payments or Schedule SE filing

2026 Quarterly Estimated Tax Due Dates

If you expect to owe $1,000 or more in federal taxes for the year, you're generally required to pay estimated taxes quarterly.

Quarter	Income Period	Due Date	Est. Payment
Q1	Jan 1 – Mar 31	April 15, 2026	—
Q2	Apr 1 – May 31	June 16, 2026	—
Q3	Jun 1 – Aug 31	September 15, 2026	—
Q4	Sep 1 – Dec 31	January 15, 2027	—
Annual Total			—

Underpayment penalty applies if you pay less than 90% of current year's tax or 100% of prior year's tax. Consult IRS Form 1040-ES for exact instructions.

Common Self-Employment Deductions

These deductions reduce your net SE income — lowering both your SE tax and income tax.

Home Office

Dedicated workspace as % of home sq. footage

Vehicle / Mileage

$0.70/mile (2025 rate) or actual expenses

Health Insurance

100% deductible above-the-line (Schedule 1)

Software & Tools

SaaS subscriptions, hardware, internet

SEP-IRA / Solo 401(k)

Up to 25% of net SE income, max $70,000

Professional Services

Accountant, legal, and consulting fees

Compare: Contractor vs Employee

Curious whether hiring you as a 1099 contractor vs W-2 employee makes sense for your clients? See the full cost comparison from the employer's perspective.

W-2 vs 1099 Calculator Employee Cost Calculator Payroll Tax Calculator

Estimates only. These results are based on publicly available data and standard formulas. Actual costs may vary based on your specific circumstances. This calculator does not constitute financial, tax, or legal advice. Consult a qualified professional for advice on your situation.

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