If you work for yourself, you're paying both halves of FICA. Here's how it works, how much you'll pay, and how to plan ahead.
When you're an employee, your employer pays half of your Social Security and Medicare taxes, and you pay the other half. When you're self-employed, you pay both halves — that's the self-employment tax.
It's one of the biggest surprises for new freelancers. Here's everything you need to know.
Self-employment (SE) tax is the Social Security and Medicare tax paid by people who work for themselves. In 2026, the combined rate is 15.3% of your net earnings:
| Component | Rate | Cap |
|---|---|---|
| Social Security (OASDI) | 12.4% | $184,500 (2026 wage base) |
| Medicare (HI) | 2.9% | No cap |
| Total SE Tax | 15.3% | SS portion capped |
High earners may also owe an Additional Medicare Tax of 0.9% on income above $200,000 (single) or $250,000 (married filing jointly).
Here's where it gets interesting: you don't pay SE tax on your full net income. The IRS lets you multiply your net earnings by 92.35% before applying the 15.3% rate.
Why? The adjustment accounts for the fact that the "employer half" of your SE tax is deductible. It approximates what your earnings would be after that deduction.
Say your freelance income after business expenses is $85,000.
| Step | Calculation | Amount |
|---|---|---|
| Net earnings adjustment | $85,000 × 92.35% | $78,498 |
| Social Security | $78,498 × 12.4% | $9,734 |
| Medicare | $78,498 × 2.9% | $2,276 |
| Total SE Tax | $12,010 | |
| Deductible half | $12,010 × 50% | −$6,005 |
So on $85,000 of freelance income, you'd owe about $12,010 in SE tax — and you can deduct $6,005 of it on your income tax return.
If you expect to owe more than $1,000 in tax, the IRS expects you to pay quarterly estimated taxes:
Failing to pay quarterly can trigger underpayment penalties — the IRS charges interest on the amount you should have paid each quarter.
If you have a regular job AND freelance income, your W-2 wages count against the Social Security wage base. If your W-2 earnings already exceed $184,500, you don't pay any Social Security tax on your freelance income — just the 2.9% Medicare portion.
This can significantly reduce your effective tax rate if you're a high earner with both income sources.
Want your exact numbers? Use our free calculator — it handles the 92.35% adjustment, the wage base cap, W-2 interaction, and quarterly payment estimates automatically.
Free, private, runs entirely in your browser. No sign-up.
Try the Calculator →Yes. Self-employment tax is separate from regular income tax. You pay both — SE tax covers Social Security/Medicare, and income tax covers federal (and possibly state) income tax.
You can deduct 50% of your SE tax as an adjustment to income on Schedule 1 (Form 1040). This reduces your adjusted gross income.
Generally no — rental income isn't subject to SE tax unless you're in the business of renting (e.g., running an Airbnb business). Consult a professional for specifics.
Contributions to a SEP IRA, SIMPLE IRA, or solo 401(k) reduce your net earnings from self-employment, which lowers your SE tax. It's a two-for-one tax benefit.