The self-employment tax rate is 15.3%: 12.4% for Social Security (on income up to $176,100 in 2026) and 2.9% for Medicare (no cap). Employees only see half this rate (7.65%) because employers pay the other half. Self-employed people pay both halves. On $70,000 net profit, SE tax = $9,890.
Self-employment tax catches most new freelancers and contractors off guard. When you are an employee, your employer pays half of Social Security and Medicare taxes. When you work for yourself, you pay both sides — which is why self-employed workers face a 15.3% tax before a dollar of federal income tax is calculated.
How to Calculate Your Self-Employment Tax
- 1.Calculate net profit: gross self-employment income minus business expenses
- 2.Multiply net profit by 92.35% (this accounts for the employer-equivalent deduction)
- 3.Multiply that number by 15.3%
- 4.Example: $80,000 net profit × 0.9235 = $73,880 × 0.153 = $11,304 in SE tax
Calculate Your Freelancer Tax
SE Tax by Income Level
- •$30,000 net profit → SE tax: $4,239
- •$50,000 net profit → SE tax: $7,065
- •$75,000 net profit → SE tax: $10,597
- •$100,000 net profit → SE tax: $14,130
- •$150,000 net profit → SE tax: $18,371 (SS maxes at $176,100)
The One Deduction That Reduces Your SE Tax Bill
You can deduct the employer-equivalent portion of your SE tax (50%) from your gross income when calculating your income tax. On $11,304 in SE tax, that is a $5,652 above-the-line deduction. It does not reduce your SE tax itself, but it reduces the income subject to federal income tax.
Quarterly Estimated Taxes: When to Pay
Self-employed workers must pay quarterly estimated taxes if they expect to owe $1,000+ for the year. Deadlines are typically April 15, June 15, September 15, and January 15. Missing them triggers a penalty — typically 0.5% per month on the underpaid amount.
The safest approach: pay 110% of last year's total tax bill in estimated payments (the "safe harbor" rule for those earning over $150,000). This eliminates underpayment penalties regardless of how much you earn.