Self-employment tax in 2026: what changes at the Social Security limit
Updated October 25, 2026
Self-employment tax is the Social Security and Medicare tax you pay on 1099 profit. A quick rule of thumb says it is about 14.1% of profit. That is close for many people, but it stops being true once your earnings pass the Social Security limit. Here is how it works in 2026.
The short answer
- Self-employment tax is 15.3%: 12.4% for Social Security plus 2.9% for Medicare. It is charged on 92.35% of your profit.
- The Social Security part stops at $184,500 of earnings in 2026. The Medicare part has no limit.
- Wages from a W-2 job count toward the same Social Security limit.
- An extra 0.9% Medicare tax starts at higher incomes ($200,000 single, $250,000 married filing jointly, $125,000 married filing separately).
The two parts
When you are an employee, you pay half of Social Security and Medicare tax and your employer pays the other half. When you work for yourself, you pay both halves. That is what self-employment tax is.
- Social Security: 12.4%, but only on earnings up to the yearly limit. For 2026 the limit is $184,500.
- Medicare: 2.9%, on all earnings.
Why 92.35%?
The tax is not charged on your full profit. It is charged on 92.35% of it. The IRS leaves out 7.65% of your profit (100% minus 7.65% is 92.35%). That mirrors an employee's pay, where the employer's half of the tax is not counted as wages. It lowers the tax a little. You can also deduct half of the self-employment tax when you figure your income tax.
What happens at the limit (made-up examples)
"Taxed part" is 92.35% of the profit.
| Profit | Taxed part | Social Security | Medicare | Total | % of profit |
|---|---|---|---|---|---|
| $100,000 | $92,350.00 | $11,451.40 | $2,678.15 | $14,129.55 | 14.1% |
| $250,000 | $230,875.00 | $22,878.00 | $6,695.38 | $29,573.38 | 11.8% |
At $100,000 of profit, the whole amount is under the Social Security limit, so the tax is about 14.1% of profit. At $250,000, the Social Security part stops at $184,500 (12.4% of that is $22,878.00). Medicare keeps going. The total is about 11.8% of profit.
The quick rule of thumb (14.13% of profit, with no limit) would give $35,323.88 at $250,000, which is $5,750.50 too high. These examples leave out the extra 0.9% Medicare tax and all income tax.
If you also have a W-2 job
Social Security tax is worked out on your wages and your 1099 profit together. If your W-2 job already pays you up to the limit, there may be little or no room left for the Social Security part of your 1099 profit. If your W-2 pay is lower, there is more room. The calculator's side-gig option takes this into account.
Other things to know
- If your net earnings from 1099 work are under $400 for the year, self-employment tax generally does not apply.
- The Social Security limit changes most years. The figure above is for 2026.
- Self-employment tax is separate from income tax. See how much to set aside for 1099 taxes.
Let the calculator handle the limit
The free calculator applies the 2026 Social Security limit for you, including when a W-2 job already uses part of it. No sign-up. What you type stays in your browser.
Open the free calculatorSources
Scrubs & Fine Print gives educational information only, not personal tax, legal or financial advice. Rules, limits and dates change, and your situation may differ. Examples use made-up numbers. Check with a CPA or a lawyer before you decide. Figures are for tax year 2026.