Estimate your Self-Employment (Social Security + Medicare) tax on freelance or 1099 net earnings.
Self-employment tax covers the Social Security (12.4%) and Medicare (2.9%) portions that an employer would normally split with you. It applies to 92.35% of your net self-employment earnings. Social Security tax stops once earnings pass the annual wage base cap (illustrative $176,100 for 2026); Medicare tax continues on all earnings.
Illustrative estimate only, using simplified/rounded 2026 figures — not tax advice. Actual federal, state, and payroll tax rules are more detailed. Always confirm with the IRS or a licensed tax professional.
Self-employment tax exists because a freelancer or business owner has no employer to split FICA with — so the self-employed pay both the employee and employer halves themselves, for a combined 15.3% rate: 12.4% for Social Security (up to the annual wage base, $184,500 for 2026) plus 2.9% for Medicare (no cap, plus an additional 0.9% above $200,000 of income). This applies to net self-employment earnings, not gross revenue, and it is calculated separately from — and in addition to — regular federal income tax.
There is a partial offset: half of self-employment tax paid is deductible from income for federal income tax purposes, which softens the total burden somewhat, though it does not reduce the self-employment tax bill itself. Because no employer withholds this automatically, most self-employed people need to make quarterly estimated tax payments to the IRS rather than paying it all at once when filing.
Business revenue minus allowable business expenses, roughly the same profit figure reported on Schedule C. Only 92.35% of that net profit is actually subject to self-employment tax, a built-in adjustment that approximates the employer-side deduction a traditional employee's wages never see.
Generally yes, on the self-employment portion of income specifically. If wages from the regular job already exceed the Social Security wage base, that reduces or eliminates the Social Security portion owed on the self-employment income too, since the cap is per person, not per income source.
Typically quarterly — mid-April, mid-June, mid-September, and mid-January of the following year are the standard IRS estimated tax deadlines, though exact dates shift slightly year to year around weekends and holidays.
It can. Electing S-corp tax treatment lets an owner split income between a salary (subject to payroll tax) and distributions (which are not), which is a common reason growing businesses restructure — but it adds payroll administration and only pays off past a certain income level.