Schedule SE: calculating self-employment tax

Schedule SE is where sole proprietors, single-member LLC owners and partners work out their Social Security and Medicare tax. The calculation has a few steps that are easy to miss. This guide walks through them with a worked example.

By Muhammad Bilal, Chartered Accountant. Reviewed by Awais Jameel, Chartered Accountant. Checked against official sources on . 2 minute read.

Short answer

Schedule SE calculates self-employment tax on net earnings from self-employment. Multiply net profit by 92.35%, then apply 12.4% Social Security tax up to the 2026 wage base of $184,500, less any W-2 wages, and 2.9% Medicare tax on all of it. You file it if net earnings are $400 or more, and deduct half the tax on your Form 1040.

At a glance

Who files
Net self-employment earnings of $400 or more
Net earnings
92.35% of net profit
Social Security
12.4% up to $184,500 for 2026
Medicare
2.9% on all net earnings
Additional Medicare
0.9% above $200,000, on Form 8959
Deduction
Half the SE tax, on Schedule 1
Schedule SE: calculating self-employment taxSteps: 1. Start with net profit; 2. Multiply by 92.35%; 3. Apply Social Security tax; 4. Apply Medicare tax; 5. Carry the results to your return.THE PROCESS AT A GLANCESchedule SE: calculating self-employment tax1Start with netprofitFrom Schedule C, pluspartnershipself-employment incomefrom Schedule K-12Multiply by92.35%The result is netearnings fromself-employment3Apply SocialSecurity tax12.4% on net earningsup to $184,500 for2026, reduced by anyW-2 wages alreadycounted4Apply Medicaretax2.9% on all netearnings, with no limit5Carry the resultsto your returnThe tax to Schedule 2,and half of it as adeduction on Schedule 1Checked against official sourcesTax BakersSchedule SE: calculating self-employment taxSteps: 1. Start with net profit; 2. Multiply by 92.35%; 3. Apply Social Security tax; 4. Apply Medicare tax; 5. Carry the results to your return.THE PROCESS AT A GLANCESchedule SE: calculatingself-employment tax1Start with net profitFrom Schedule C, plus partnershipself-employment income from Schedule K-12Multiply by 92.35%The result is net earnings fromself-employment3Apply Social Security tax12.4% on net earnings up to $184,500 for2026, reduced by any W-2 wages alreadycounted4Apply Medicare tax2.9% on all net earnings, with no limit5Carry the results to your returnThe tax to Schedule 2, and half of it as adeduction on Schedule 1Checked against official sourcesTax Bakers
The process at a glance: 1. Start with net profit; 2. Multiply by 92.35%; 3. Apply Social Security tax; 4. Apply Medicare tax; 5. Carry the results to your return.

Who files Schedule SE?

Anyone with net earnings from self-employment of $400 or more: sole proprietors, owners of single-member LLCs taxed by default, and partners whose share is self-employment income. Church employees with $108.28 or more of church income also file. S corporation owners do not; their wages are taxed through payroll. See self-employment tax explained.

How is the tax calculated?

  1. Start with net profit

    From Schedule C, plus partnership self-employment income from Schedule K-1.

  2. Multiply by 92.35%

    The result is net earnings from self-employment.

  3. Apply Social Security tax

    12.4% on net earnings up to $184,500 for 2026, reduced by any W-2 wages already counted.

  4. Apply Medicare tax

    2.9% on all net earnings, with no limit.

  5. Carry the results to your return

    The tax to Schedule 2, and half of it as a deduction on Schedule 1.

What does a worked example look like?

StepAmount
Net profit on Schedule C$100,000
Net earnings: 92.35%$92,350
Social Security: 12.4%$11,451
Medicare: 2.9%$2,678
Self-employment tax$14,130
Deduction for half$7,065

How do W-2 wages interact?

Social Security tax applies only once up to the wage base. If you also have a job, the wages already taxed for Social Security reduce the amount of self-employment earnings subject to the 12.4% part. Medicare applies to both in full. See side hustle taxes.

What about the Additional Medicare Tax?

A further 0.9% applies to combined wages and self-employment earnings above $200,000 for single filers, $250,000 for joint filers and $125,000 for married filing separately. It is calculated on Form 8959, not Schedule SE.

How can it be reduced?

Claim every allowable business expense, since the tax is on net profit. For higher profits, an S corporation election can reduce it by paying part of the profit as salary and the rest as distributions. See when an S corp election saves tax.

Do non-residents file Schedule SE?

Generally no. Non-resident aliens are not subject to US self-employment tax, unless a totalization agreement provides otherwise. See Form 1040-NR.

Want your SE tax worked out properly?

We prepare your Schedule SE with your return, and check whether an S corporation election would reduce it.

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Questions people ask

What is Schedule SE?

The form that calculates self-employment tax, the Social Security and Medicare tax of the self-employed.

When do I need to file Schedule SE?

When your net earnings from self-employment are $400 or more.

What is the self-employment tax rate?

15.3%: 12.4% Social Security up to $184,500 for 2026, and 2.9% Medicare on all net earnings, applied to 92.35% of net profit.

Can I deduct self-employment tax?

Half of it, as an adjustment to income on Schedule 1.

Sources

Every fee, date and rule on this page was taken from these official and primary sources.

  1. IRS: About Schedule SE (Form 1040)
  2. IRS: Self-employment tax (Social Security and Medicare taxes)
  3. Social Security Administration: Contribution and benefit base, 2026

Rules and fees change. If you are reading this long after October 1, 2026, confirm the figures with the source before you rely on them.

Freelancers and self-employedSelf-employment tax explainedFederal tax formsSchedule C (Form 1040): reporting business incomeBusiness tax by entity typeS corp election: when it saves tax and when it doesn't

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This guide is general information. It is not tax or legal advice for your situation.