Self-Employment Tax

Personal Finance

Self-employment tax (SE tax) is the 15.3% combined Social Security and Medicare tax that self-employed individuals pay on their net earnings — covering both the employee and employer halves of FICA. It applies to net earnings from Schedule C above $400. The Social Security portion (12.4%) applies up to the annual wage base ($176,100 in 2026); the Medicare portion (2.9%) applies to all earnings, with an extra 0.9% on income above $200K single / $250K married. You deduct half of SE tax on Form 1040 as an adjustment. SE tax is on top of income tax — not a substitute.