Self-Employment Tax Explained: How Much 1099 Workers Owe in 2026

Self-employment tax is 15.3% of 92.35% of your net profit: 12.4% for Social Security and 2.9% for Medicare. On $80,000 of net profit in 2026, that's $11,304, before income tax is added on top, which leaves a single filer about $61,170 ($5,097 a month) in a state with no income tax. It is separate from, and in addition to, federal income tax.

This guide walks through the math, compares take-home pay across states, and covers the part most new freelancers miss: paying quarterly instead of waiting for one bill in April.

Disclosure: we make Salary Left, the free expense tracker linked below, and the salary calculator behind these figures, which now has a self-employed mode.

How we calculated it

The numbers below come from the same engine behind our salary calculator, run with its self-employed option on. Unless a section says otherwise, the person in every example:

• is a sole proprietor or single-member LLC filing as single, with no other income;
• has already subtracted business expenses, so the figure used is net profit, not revenue;
• takes the standard deduction and claims no other credits or deductions.

Federal and payroll figures come from the IRS and the Social Security Administration. State figures come from Tax Foundation data dated February 11, 2026.

Why self-employment tax exists

A W-2 employee's paycheck shows 7.65% withheld for Social Security and Medicare, not 15.3%. That's because an employer pays a matching 7.65% on top, out of its own pocket, which never appears on the employee's pay stub. When you're self-employed, there's no employer to split it with, so you pay both halves yourself. It isn't a penalty for being self-employed; it's the same 15.3% that was always being paid on your wages, just now visible as one bill instead of two invisible ones.

The IRS softens this slightly in two ways: you only pay the 15.3% on 92.35% of net profit, not the full amount, and you can deduct half of what you pay from your income tax. Neither change makes self-employment tax optional, but together they bring the real cost down from a flat 15.3% to an effective rate of about 14.13% of net profit, at any income below the Social Security cap.

Where $11,304 of an $80,000 profit goes

That $11,304 is the same whichever state you live in and comes before federal or state income tax. A single filer with no other deductions also owes $7,527 in federal income tax on this profit (taxable income works out to $58,248, after the standard deduction and the half-SE-tax deduction above), for a combined federal bill of $18,830, leaving $61,170 in a state with no income tax.

Self-employed take-home pay by pay period

$80,000 net profit in fourteen states

* This state has city or county income taxes that are not included. Every "Payroll tax" cell is blank here on purpose: California's state disability insurance, Washington's long-term-care contribution and Massachusetts' paid-leave charge are payroll programs that don't apply automatically to self-employment income the way they do to wages.

Self-employed vs. the same profit as a salary

The same $80,000 looks different depending on how it's earned, because of who pays the "other half" of Social Security and Medicare:

The self-employed version pays $3,940 less, almost entirely the extra 7.65% that a W-2 employer would otherwise cover. This is why freelance and contract rates are usually quoted higher than an equivalent salary: the gap isn't profit, it's the employer's half of payroll tax that now has to come from the same invoice.

Paying quarterly, not just once a year

If you expect to owe $1,000 or more in tax for 2026 after any withholding, the IRS expects you to pay in four instalments through the year, not one lump sum the following April. The 2026 due dates are:

These are uneven on purpose; they're not four equal three-month blocks. Missing one can trigger an underpayment penalty (an interest charge, not a flat fine, currently running at a few percent a year and adjusted quarterly), even if the full balance is paid by the filing deadline.

The safe harbor rule

You won't owe a penalty if your four payments add up to the smaller of:

• 90% of what you'll owe for 2026, or
• 100% of what you owed for 2025 (110% if your 2025 adjusted gross income was over $150,000).

The second option is the easier one to plan around: take last year's total tax bill, divide by four, and pay that each quarter. If this year turns out better than last, you'll owe more at filing time, but no penalty. If it turns out worse, you've already overpaid and get it back as a refund.

What a half-deduction actually saves you

The "half of self-employment tax is deductible" rule doesn't cut your self-employment tax bill. It lowers the income your federal (and most state) tax is calculated on. On the $80,000 example above, deducting $5,652 at a 22% federal bracket saves about $1,243 in income tax. It's a real saving, just a smaller and less direct one than it sounds.

Two deductions this guide does not calculate, because they depend on details specific to your business, are worth knowing exist:

• The qualified business income deduction, up to 20% of qualified business income for many sole proprietors and pass-through businesses, subject to income limits and business-type rules.
• The self-employed health insurance deduction, for premiums paid for your own medical, dental and qualifying long-term-care insurance, if you weren't eligible for an employer's plan.

Both can meaningfully lower a self-employed tax bill beyond what's shown here. A tax professional can confirm whether either applies to you.

Turning $5,097 a month into a plan

Once quarterly tax money is set aside, plan the rest the same way a salaried budget would. On $5,097 a month, the 50/30/20 rule gives you:

• Needs (50%): about $2,549 for rent or mortgage, groceries, utilities, insurance and transport.
• Wants (30%): about $1,529 for eating out, travel and entertainment.
• Savings (20%): about $1,019, which for a freelancer should include a buffer for months with less work, not just long-term savings.

Our budget calculator shows the split for any amount, and because freelance income varies month to month, our guide on how to track expenses covers methods that work even when the amount coming in isn't the same every time.

Sources and limits

• Self-employment tax rate, the 92.35% adjustment and the half-tax deduction: the IRS's Self-Employment Tax (Social Security and Medicare Taxes) page and Schedule SE instructions.
• Estimated tax due dates and the safe harbor rule: the IRS's Estimated Taxes FAQ and Form 1040-ES.
• Federal brackets and standard deductions: the IRS's tax year 2026 inflation adjustments (Rev. Proc. 2025-32).
• Social Security wage base: the Social Security Administration's 2026 fact sheet.
• State rates, brackets, deductions and exemptions: Tax Foundation's 2026 state income tax rates and brackets, as of February 11, 2026.

Treat these figures as a planning estimate, not tax, legal or financial advice. This guide does not cover the qualified business income deduction, the self-employed health insurance deduction, S-corporation elections, local taxes, or any credits. For your exact tax, talk to a tax professional or use the IRS's own worksheets.