Self-employment tax

Self-employment taxEntity typesSelf-employment taxSocial Security and Medicare on net earnings from self-employment — 92.35% of net profit, taxed at 12.4% up to the year's wage base and 2.9% on all of it — owed once net earnings reach $400, with half deducted from income. Sole proprietors and general partners pay it on Schedule SE is Social Security and Medicare for people nobody employs. An employee splits FICAPayrollFICASocial Security tax — 6.2% of wages up to the year's wage base — and Medicare tax — 1.45% of all wages — each paid twice: withheld from the employee and matched by the employer. 7.65% a side below the wage base with the employer; a sole proprietor or a general partner pays both halves on Schedule SE. Net earnings are 92.35% of net profit, taxed at 12.4% up to the year's wage baseTaxSocial Security wage baseThe maximum annual wages subject to the 6.2% Social Security tax, for employee and employer each — $184,500 in 2026, $176,100 in 2025, indexed every year. Medicare tax has no cap ($184,500 for 2026) and 2.9% on all of it, once they reach $400. Half the tax is deducted from income.