# Self-employment tax

> Both halves of Social Security and Medicare, 15.3% on 92.35% of net profit, worked on one Northwind founder's share.

Source: https://lopifi.com/learn/how-business-entities-are-taxed/self-employment-tax
Part of: Lopifi — US GAAP books on autopilot, checked by a CPA (https://lopifi.com)

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**How is self-employment tax calculated?** Both halves of Social Security and Medicare, 15.3% on 92.35% of net profit, worked on one Northwind founder's share.

[Self-employment tax](https://lopifi.com/md/glossary/self-employment-tax) is Social Security and Medicare for people nobody employs. An employee splits [FICA](https://lopifi.com/md/glossary/fica) 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 base](https://lopifi.com/md/glossary/social-security-wage-base) ($184,500 for 2026) and 2.9% on all of it, once they reach $400. Half the tax is deducted from income.

> “If line 3 is more than zero, multiply line 3 by 92.35% (0.9235). … Multiply the smaller of line 6 or line 9 by 12.4% (0.124) … Multiply line 6 by 2.9% (0.029) … Multiply line 12 by 50% (0.50).”

— [Schedule SE (Form 1040) (2025), lines 4a, 10, 11, 13](https://www.irs.gov/pub/irs-pdf/f1040sse.pdf) (PDF), Schedule SE, Self-Employment Tax (PDF)

> “The rate of social security tax on taxable wages is 6.2% each for the employer and employee. The social security wage base limit is $184,500. The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2025. There is no wage base limit for Medicare tax.”

— [IRS Pub. 15 (2026), What's New](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF), Social Security and Medicare tax for 2026

| Schedule SE | Working | Amount |
| --- | --- | --- |
| Net profit (the K-1 share) | Half the illustrative year | $10,484.40 |
| Line 4a, net earnings | × 92.35% | $9,682.34 |
| Line 10, Social Security | × 12.4% | $1,200.61 |
| Line 11, Medicare | × 2.9% | $280.79 |
| Line 12, self-employment tax |  | $1,481.40 |
| Line 13, deduction | Half of it | $740.70 |

One Northwind founder's share, if Northwind were an LLC taxed as a partnership: half of $20,968.80.

> **Which year's form.** The line numbers are the 2025 Schedule SE's, the latest published when this was checked. The 2026 wage base is the Social Security Administration's figure as Pub. 15 (2026) states it. The Additional Medicare Tax on high earners is figured separately, on Form 8959.

## Where this page's rules come from

- [Schedule SE (Form 1040) (2025), lines 4a, 10, 11, 13](https://www.irs.gov/pub/irs-pdf/f1040sse.pdf) (PDF) — Schedule SE, Self-Employment Tax (PDF) (form)
- [IRS, Self-employment tax (Social Security and Medicare taxes)](https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes) — Self-employment tax: 12.4% Social Security, 2.9% Medicare, from $400 of net earnings (irs)
- [26 U.S.C. §1402(a), (a)(13)](https://www.law.cornell.edu/uscode/text/26/1402) — Net earnings from self-employment include a partner's distributive share — except a limited partner's (statute)
- [IRS Pub. 15 (2026), What's New](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF) — Social Security and Medicare tax for 2026 (irs)

- **Track:** [Entity types](https://lopifi.com/md/learn/entities)
- **Part of:** [How each entity is taxed](https://lopifi.com/md/learn/how-business-entities-are-taxed) — 4 min
- **Terms taught:** [Self-employment tax](https://lopifi.com/md/glossary/self-employment-tax), [FICA](https://lopifi.com/md/glossary/fica), [Social Security wage base](https://lopifi.com/md/glossary/social-security-wage-base)
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