2026 Self-Employment Tax Rates, Wage Base and Thresholds

By Reese Calloway · Updated 2026-10-14

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For 2026, self-employment tax is 15.3% of your net earnings from self-employment: 12.4% for Social Security and 2.9% for Medicare. Net earnings are generally 92.35% of your business profit. The 12.4% part stops once net earnings plus any W-2 Social Security wages reach the 2026 wage base of $184,500, which is $8,400 higher than the 2025 base of $176,100. A separate 0.9% Additional Medicare Tax, figured on Form 8959, applies above $200,000 of self-employment income for a single filer. For 2027, the Social Security Administration has set the wage base at $192,300; what changes in 2027 is covered below.

The 2026 calculation in order

The steps follow Schedule SE. Of the figures above, only the wage base and the amounts derived from it changed from 2025 to 2026.

1. Combine net profit from all of your businesses. A loss in one reduces profit from another.
2. Multiply by 92.35% (0.9235). If the result is under $400 and you have no church employee income of $108.28 or more, you owe no self-employment tax.
3. Social Security part: 12.4% of the smaller of your net earnings or the room left under $184,500 after W-2 Social Security wages.
4. Medicare part: 2.9% of all net earnings.
5. Add the two parts. This is your self-employment tax, reported on Schedule 2 (Form 1040).
6. Deduct half of it when figuring adjusted gross income.
7. On Form 8959, apply 0.9% to self-employment income (the step 2 amount) above your filing-status threshold, after reducing the threshold by any Medicare wages.

Seen per dollar of profit, 15.3% × 92.35% means about 14.13 cents of self-employment tax on each added dollar until the wage base is reached. Above it, only the Medicare part continues: 2.9% × 92.35%, or about 2.68 cents. Above the Additional Medicare threshold, another 0.9% × 92.35%, about 0.83 cents, is added on Form 8959. For a single filer with no wages, that starts at about $216,567 of profit ($200,000 ÷ 0.9235).

Example: 2026 self-employment tax at $30,000, $100,000 and $250,000 of profit

Assumptions: tax year 2026, single filer, no W-2 wages, no church employee income, regular method. Amounts are rounded to the cent at each step.

In Example 3 the wage base caps the Social Security part. Without the cap, the Social Security part would be $230,875 × 12.4% = $28,628.50, so the cap removes $5,750.50. The Additional Medicare Tax is ($230,875 − $200,000) × 0.9% = $30,875 × 0.9% = $277.88. It is a separate Form 8959 item: it is not part of line E and is not included in the deduction on line F. Together the two taxes come to $29,851.26, or 11.94% of profit.

How W-2 wages reduce the 12.4% part

The $184,500 wage base covers your W-2 jobs and your self-employment combined. Social Security wages from your Form W-2 use up the base first, and the 12.4% applies only to what is left. If your 2026 Social Security wages are $184,500 or more, you owe no Social Security part on self-employment earnings at all. The 2.9% Medicare part still applies to every dollar. On a joint return, each spouse with self-employment income files a separate Schedule SE against his or her own wages.

Example 4: $150,000 of W-2 Social Security and Medicare wages plus $50,000 of 2026 freelance profit, single filer.

• Net earnings: $50,000 × 0.9235 = $46,175.00
• Room left under the wage base: $184,500 − $150,000 = $34,500.00
• Social Security part: $34,500.00 × 12.4% = $4,278.00, instead of $46,175.00 × 12.4% = $5,725.70
• Medicare part: $46,175.00 × 2.9% = $1,339.08
• Self-employment tax: $4,278.00 + $1,339.08 = $5,617.08, which is $1,447.70 less than with no W-2 job
• Additional Medicare Tax: the $200,000 threshold minus $150,000 of Medicare wages leaves $50,000; $46,175 is below that, so $0

Medicare wages reduce the Additional Medicare threshold in a similar way, as the last line shows. On a joint return, both spouses’ Medicare wages and self-employment income count against the $250,000 threshold.

What the deduction for half does and does not do

You deduct the employer-equivalent half of your Schedule SE tax as an adjustment in figuring adjusted gross income, so it applies whether or not you itemize. The IRS is explicit that it affects only income tax: it does not reduce your net earnings from self-employment or the self-employment tax itself. In Example 2 the $7,064.78 deduction lowers taxable income; the tax it saves is that amount times your marginal income tax rate, not $7,064.78.

The Additional Medicare Tax has no employer match, and it is figured on Form 8959 rather than Schedule SE, so none of it is part of the deductible half.

The $400 and $108.28 filing thresholds

The $400 test applies to net earnings after the 92.35% step, not to profit. Profit of $433 gives $433 × 0.9235 = $399.88, so no self-employment tax is due. Profit of $434 gives $434 × 0.9235 = $400.80, and then the tax applies to the whole amount: $400.80 × 15.3% = $61.32. The side-hustle threshold guide walks through that boundary in more detail.

Church employee income has its own trigger of $108.28. Neither test depends on age: the tax applies even if you already receive Social Security or Medicare benefits.

The 2027 wage base: $192,300

In October 2026 the Social Security Administration set the 2027 contribution and benefit base at $192,300, up $7,800 (4.2%) from $184,500. It applies to net earnings from self-employment earned in 2027, which are reported on the 2027 return filed in 2028 and paid through the 2027 estimated tax payments that start in April 2027. Nothing else on this page changes: the 12.4% and 2.9% rates are set by statute, and the Additional Medicare Tax thresholds are not indexed for inflation.

The higher base matters only once net earnings plus W-2 Social Security wages pass $184,500. Below that, the same profit produces the same self-employment tax in both years. At or above $192,300, the 2027 Social Security part is $967.20 higher ($7,800 × 12.4%), before the deduction for half of the tax. In Example 3 above, $250,000 of profit, the Social Security part rises from $22,878.00 to $23,845.20. The self-employment tax calculator has a 2027 option for planning next year’s payments.

Paying 2026 self-employment tax during the year

No employer withholds self-employment tax, so it is paid through estimated tax payments along with income tax. The quarterly estimated taxes guide covers how to size and schedule those payments, and freelancer tax deadlines for 2026 and 2027 lists the dates. To run your own numbers, the self-employment tax calculator follows the steps above. For the reasoning behind the 15.3% rate and the 92.35% factor, see self-employment tax explained.

This page is general information about 2026 federal self-employment tax, not tax advice.

Sources

• IRS: Self-employment tax (Social Security and Medicare taxes)
• IRS Topic No. 554, Self-employment tax
• IRS Instructions for Schedule SE (Form 1040), 2025
• IRS Topic No. 560, Additional Medicare tax
• IRS Instructions for Form 8959, 2025
• Social Security Administration: Contribution and benefit base