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Tax & Salary2026 SECA rates

Self-Employment Tax Calculator

Working 1099 means paying both halves of Social Security and Medicare — the part an employer normally covers is now yours. This works out the self-employment tax, the deduction that offsets part of it, and what to set aside each quarter.

Contract Income

Net earnings = gross receipts minus allowable business expenses.

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Deductible costs: equipment, software, mileage, home office
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Counts toward the Social Security wage cap first
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SELF-EMPLOYMENT TAX
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Social Security portion—
Medicare portion—
Deductible half—
Net earnings subject to SE—
Estimated federal income tax—
Total federal liability—
Set aside each quarter—
Equivalent W-2 salary—

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Why 15.3% and not 7.65%

An employee pays 7.65% in FICA and the employer quietly pays a matching 7.65%. A self-employed person is both, so the rate is 15.3% — 12.4% for Social Security up to the annual wage base, plus 2.9% for Medicare with no ceiling. An additional 0.9% Medicare surtax applies above $200,000 (single) or $250,000 (married filing jointly).

Two adjustments that soften the blow

First, SE tax is computed on 92.35% of net earnings, not 100%. That factor exists to mirror the fact that an employer's half of FICA is not itself taxed as wages.

Second, half of the SE tax is deductible against income tax. It is an above-the-line adjustment, so you get it whether or not you itemise. That deduction is included in the federal income tax estimate here.

The contract rate most freelancers set too low

A $90,000 salary is not matched by $90,000 of 1099 income. You are absorbing the employer's 7.65%, and usually health insurance, paid leave and retirement matching as well. The equivalent W-2 salary figure here shows what your contract income is really worth once the employer-side tax is stripped out — the gap is typically 7–8% before benefits are even considered.

Quarterly payments

Estimated tax is due four times a year, generally 15 April, 15 June, 15 September and 15 January. Underpaying triggers a penalty even if you settle in full by April. The safe-harbour rule usually protects you if you pay at least 90% of the current year's liability or 100% of last year's (110% above certain income levels).

Frequently Asked Questions

What percentage should a freelancer set aside for tax?
A common rule of thumb is 25–30% of net earnings, which covers self-employment tax plus a moderate federal income tax bracket. High earners or those in states with income tax should use the calculated figure here rather than the rule of thumb.
Do I pay self-employment tax if I also have a W-2 job?
Yes, on the 1099 portion. But your W-2 wages count first toward the Social Security wage base, so if your salary already exceeds the cap, the 12.4% Social Security part no longer applies to the contract income — only the 2.9% Medicare part does. This calculator handles that.
Can I deduct business expenses before calculating SE tax?
Yes. Self-employment tax applies to net earnings, meaning gross receipts minus ordinary and necessary business expenses. Every legitimate deduction cuts both the income tax and the 15.3% SE tax, which makes expense tracking unusually valuable for contractors.
What hourly rate matches a salaried job?
Start with the equivalent-salary figure here, then add the cost of benefits you now buy yourself — health insurance, retirement contributions, and unpaid time off. In practice most contractors need 25–40% above the salaried rate to end up level.
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Related Calculators

Tax Bracket Calculator Federal brackets on the income side. Hourly to Salary Set the contract rate correctly. Gross-to-Net Paycheck Compare against an employed equivalent. Savings Goal Park the quarterly set-aside somewhere useful.