Schedule SE (Self-Employment Tax)
Also known as: self-employment tax, SECA tax
The IRS form that computes self-employment tax — the self-employed equivalent of FICA — at a combined 15.3% on net earnings from self-employment, half of which is deductible above the line.
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Schedule SE (Form 1040) calculates self-employment tax under the Self-Employment Contributions Act (SECA), Internal Revenue Code sections 1401 and 1402. It is the self-employed counterpart to the FICA payroll tax that wage earners split with an employer. Because a sole proprietor, partner, or single-member LLC owner is simultaneously employer and employee, they owe both halves: a combined 15.3% rate made up of 12.4% for Social Security (OASDI) and 2.9% for Medicare.
The tax is not levied on gross revenue. Net profit from Schedule C (or Schedule F for farmers, or a partnership K-1) is first multiplied by 92.35% to reach what the form calls net earnings from self-employment — the 7.65% haircut mirrors the employer-side FICA that a wage earner never pays income tax on. Only the resulting figure is taxed. A consultant with $100,000 of Schedule C profit computes self-employment tax on $92,350, owing roughly $14,130 before the deduction described below.
The 12.4% Social Security portion applies only up to the annual Social Security wage base — $184,500 for 2026 — and any W-2 wages already taxed for Social Security reduce that ceiling dollar for dollar, so someone with a high day-job salary may owe only the 2.9% Medicare slice on side income. The Medicare portion has no ceiling, and an extra 0.9% Additional Medicare Tax applies to combined earnings above $200,000 (single), $250,000 (married filing jointly), or $125,000 (married filing separately).
One structural relief softens the blow: one-half of the self-employment tax is an above-the-line deduction on Schedule 1, reducing adjusted gross income (though not the self-employment tax itself). That deduction is why the effective burden lands below the headline 15.3%. High earners who want to cap self-employment tax often weigh an S-corporation election, which reclassifies some profit as distributions exempt from SECA. Schedule SE carries the FICA-equivalent total onto Form 1040, and quarterly estimated taxes are how the self-employed prepay it across the year rather than facing one large April bill.
- Self-employment tax 2026: how Schedule SE computes the 15.3% Schedule SE applies 15.3% (12.4% Social Security + 2.9% Medicare) to 92.35% of net earnings. See the wage-base cap and the half-SE-tax deduction.
- S-corp election for the self-employed — when the SE tax math works How an S-corp election splits net business income between W-2 salary and distribution, the reasonable-salary standard, and the savings threshold.
- Quarterly estimated taxes — the 1099 worker survival guide How to pay quarterly estimated taxes on 1099 income: safe-harbor rules, Form 1040-ES, the four dates, underpayment penalty, what to do if you missed a quarter.
- FICA (Federal Insurance Contributions Act) The combined Social Security (6.2%) and Medicare (1.45%) tax withheld from W-2 wages by employers, matched by an equivalent employer contribution. For 1099 self-employed income, the same tax appears as 15.3% self-employment tax on Schedule SE.
- OASDI wage base (Social Security wage base) The maximum amount of wages subject to the 6.2% Social Security (OASDI) payroll tax each calendar year. $184,500 in 2026 (up from $176,100 in 2025), adjusted annually by the Social Security Administration based on national average wage growth. The Medicare portion of FICA has no wage base.
- Additional Medicare Tax A 0.9% federal surtax on wages, self-employment income, and railroad retirement compensation above filing-status thresholds ($200,000 single / $250,000 MFJ / $125,000 MFS). Enacted by the Affordable Care Act in 2010. Thresholds are not indexed for inflation.
- QBI deduction (Qualified Business Income deduction, IRC § 199A) A federal deduction of up to 20% of qualified business income from pass-through entities (sole proprietorships, partnerships, S corporations, qualifying trusts) available regardless of whether the filer takes the standard or itemized deduction. Phase-outs apply at higher income levels.
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