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Self-employment tax: 15.3%, 92.35%, and the wage base

Checked October 17, 2026 · Educational summary

Per IRS Topic 554, self-employment tax is 12.4% for Social Security plus 2.9% for Medicare. It is generally applied to 92.35% of net earnings from self-employment. You usually owe it if net earnings are $400 or more. Net profit is gross business income minus ordinary and necessary business expenses.

The rate and the 92.35% factor

Topic 554 says the amount subject to self-employment tax is generally 92.35% of net earnings, and that you calculate net earnings by subtracting expenses from gross business income. Schedule SE instructions say you must file Schedule SE if line 4c is $400 or more. On the form, line 4c is the 92.35% amount (plus any church-employee income). This site's planner follows that line 4c test.

The Schedule SE instructions page still described the 2025 Social Security maximum when we read it on October 17, 2026. The $400 filing test is the part used here, not that 2025 dollar cap.

Social Security wage base

The law caps earnings subject to the Social Security portion. The cap changes with the national average wage index. Medicare has no wage cap. The Social Security Administration's contribution and benefit base page, read October 17, 2026, lists $184,500 for 2026 and $192,300 for 2027. SSA states the 2027 self-employment OASDI rate as 12.4% and the Medicare hospital-insurance rate for self-employed people as 2.9%.

Form 1040-ES for 2027 was not published when we checked, so re-check IRS.gov before you treat the 2027 base as the figure on a voucher. The SSA page already states $192,300 for earnings in 2027. That is the figure this site uses, with the source above.

Additional Medicare Tax of 0.9% applies above thresholds in Topic 554: $200,000 for most filers, $250,000 if married filing jointly, and $125,000 if married filing separately. The planner does not add that 0.9% into the suggested payment.

Made-up example below the cap

Net profit $60,000:

• $60,000 × 92.35% = $55,410
• $55,410 × 15.3% = $8,477.73 of self-employment tax
• Half of that tax is deductible when figuring adjusted gross income: $4,238.87

Income tax is separate and depends on your own situation. This page states no income-tax rates and no 2027 brackets.

Where it is reported

Compute the tax on Schedule SE, attached through Schedule 2. The deduction for one-half of the tax is claimed from Schedule SE onto Schedule 1. Estimated payments are meant to cover income tax and self-employment tax. See who pays and the safe harbor.

FAQ

Do I pay it if I receive Social Security?

Topic 554 says you can be liable even if you currently receive Social Security benefits.

Are there optional methods?

Yes, for a loss or a small amount of income. See the Instructions for Schedule SE. This site's planner does not apply them.

What we could not verify