12.4%
Social Security
on the first $184,500 (2026 cap)
on the first $184,500 (2026 cap)
Mainstreet Financial Education · Tax Year 2026
If you work for yourself, you pay both halves of Social Security and Medicare. Here is how the tax is built, what it actually costs, and how to plan for it.
Self-employment tax is the Social Security and Medicare contribution paid by people who work for themselves. Employees split this with an employer. When you are self-employed, you are both, so you pay both portions.
You owe SE tax once your net self-employment earnings reach $400 for the year.
| Tax | Rate |
|---|---|
| Social Security (capped at $184,500) | 12.4% |
| Medicare (no cap) | 2.9% |
| Total self-employment tax | 15.3% |
High earners pay an extra 0.9% Additional Medicare tax on earnings above $200,000 (single) or $250,000 (married filing jointly).
Net self-employment income: $50,000
SE tax applies to only 92.35% of net earnings, so the taxable base is $50,000 × 0.9235 = $46,175.
Half of this ($3,533) is deductible when figuring your federal income tax.
You can generally deduct 50% of your SE tax as an above-the-line adjustment to income. It does not reduce the SE tax itself, but it lowers the income your federal tax is figured on.
Work for yourself and you owe both the employee and employer share of Social Security and Medicare. That is why the self-employed often pay more payroll tax than traditional employees, and why setting aside 25–30% of income through the year prevents surprises at filing.
Turning self-employment income into a confident retirement takes a plan.
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