Self-Employment Tax for Freelancers: How It Works
When you work for yourself, no employer splits payroll taxes with you. You pay both halves yourself, which is why freelancers often owe more than they expect.
The rate
Self-employment tax is 15.3%: 12.4% for Social Security and 2.9% for Medicare. The Social Security part applies only up to the yearly wage base ($184,500 for 2026). The Medicare part has no cap, and the extra 0.9% Medicare tax applies at higher incomes.
How it is calculated
You apply the tax to 92.35% of your net self-employment earnings (profit after business expenses). You can then deduct half of the self-employment tax when figuring income tax.
Worked example: $60,000 net profit
| Step | Amount |
|---|---|
| Net profit | $60,000 |
| Times 92.35% | $55,410 |
| Times 15.3% = self-employment tax | $8,478 |
| Half deductible for income tax | $4,239 |
That is about 14.1% of profit, before federal and state income tax.
Quarterly estimated taxes
Because no employer withholds tax for you, the IRS generally expects estimated payments four times a year if you will owe a meaningful amount. Missing them can lead to penalties. The IRS publishes the exact due dates each year.
Deductions that help
- Business expenses such as software, equipment and professional fees.
- Half of self-employment tax.
- Retirement plans designed for the self-employed.
- Possible deductions for health insurance premiums and a home office, if you qualify.
What this means for pricing
Charge enough to cover taxes, expenses, unpaid time off and non-billable hours. Our freelance rate calculator turns your income goal into an hourly rate. This is general information. A tax professional can give advice for your situation.
Last reviewed: October 2026. Figures are for tax year 2026. This guide is general information, not tax, legal or financial advice.
About the author
Hari Nepal, founder and editor of Kbtrim Salary. Hi, I'm Hari Nepal, based in Nepal. I built Kbtrim Salary to make money numbers easier to understand, with free calculators that explain how they work instead of hiding the math. I use published IRS and state tax figures and update them every year. I'm not a tax professional, so the tools give estimates, not advice. If you find a mistake, please email me at harinepal2062@gmail.com. More about this site.