What is the self-employment tax rate in 2026?

15.3% of 92.35% of net profit from self-employment: 12.4% Social Security up to the $184,500 wage base (shared with any W-2 Social Security wages) plus 2.9% Medicare with no cap. Additional Medicare tax of 0.9% applies above $200,000 single or $250,000 married filing jointly. You deduct half of the 15.3% SE tax on Form 1040. Net profit under $400 generally owes no SE tax.

When are 2026 quarterly estimated taxes due?

For tax year 2026: April 15, 2026; June 15, 2026; September 15, 2026; and January 15, 2027. Pay through IRS Direct Pay or EFTPS. An extension to file is not an extension to pay.

Do I owe estimated tax if I also have a W-2 job?

Yes, if withholding plus credits will leave you owing $1,000 or more. You can raise W-4 Step 4(c) extra withholding to cover the side hustle, or send 1040-ES payments. Safe harbor to avoid the underpayment penalty is 100% of last year's tax, or 110% if prior-year AGI was over $150,000. Safe harbor avoids the penalty; it does not wipe the tax you still owe in April.

SEP IRA vs solo 401(k) in 2026 — which lets me contribute more?

Both share the $72,000 section 415(c) cap. A SEP is about 20% of net earnings after the half-SE-tax deduction, with no employee deferral and no catch-up. A solo 401(k) adds an employee deferral of $24,500 ($8,000 more at 50+, $11,250 at ages 60–63) on top of that same 20% employer piece. On modest Schedule C profit the solo 401(k) wins by a wide margin. A SEP can be opened and funded up to the tax-filing deadline including extensions. A solo 401(k) must exist by December 31 to take a 2026 employee deferral.

Is the QBI deduction still 20% in 2026?

Yes. The One Big Beautiful Bill Act made the section 199A 20% qualified business income deduction permanent. It still phases out for specified service trades above $201,775 single / $403,500 joint in 2026. Retirement contributions and the half-SE-tax deduction reduce QBI.

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Self-employment tax in 2026: you are the employer now

A W-2 splits FICA with your boss. A 1099 does not. Schedule C net profit pays both halves through self-employment tax, then federal income tax on what is left, then (usually) four estimated payments so April is not a surprise. The W-2 paycheck calculator on this site does not model that. This page does.

Updated 2026-09-08 · 11 min read · Educational, not tax advice. Run the self-employed calculator with net profit, not gross deposits.

SE tax is FICA with the other half glued on

Net profit under $400 generally owes no SE tax. Above that, Schedule SE taxes 92.35% of net profit (the 0.9235 is the statutory stand-in for the employer half you are about to deduct). On that base:

12.4% Social Security until the combined W-2 Social Security wages plus SE base hit $184,500 in 2026 (SSA / Pub 505).
2.9% Medicare with no cap.
0.9% Additional Medicare on combined Medicare wages plus SE income over $200,000 single / $250,000 married filing jointly. That extra 0.9% is not in the “half SE tax” deduction.

You deduct half of the 15.3% on Form 1040. That deduction lowers income tax. It does not lower SE tax itself. A “22% bracket” freelancer is often paying something closer to 37% on the next dollar until the Social Security wage base is used up. See marginal vs effective.

2026 figure	Amount	Where it lives
SE tax rate	15.3% of 92.35% of net profit	Schedule SE
Social Security wage base	$184,500	Shared with W-2 box 3
Standard deduction	$16,100 single / $32,200 MFJ / $24,150 HoH	Rev. Proc. 2025-32
QBI deduction	20% of qualified business income	§199A, made permanent
SEP / solo 401(k) 415(c) cap	$72,000	Notice 2025-67
Solo 401(k) employee deferral	$24,500 (+ $8,000 at 50+ / $11,250 at 60–63)	Same notice

Quarterly estimates are a calendar, not a vibe

If you expect to owe $1,000 or more after withholding and credits, Form 1040-ES applies. 2026 payment windows:

Payment	Income through	Due
1	Jan 1 – Mar 31	April 15, 2026
2	Apr 1 – May 31	June 15, 2026
3	Jun 1 – Aug 31	September 15, 2026
4	Sep 1 – Dec 31	January 15, 2027

Safe harbor (IRC §6654): pay at least 100% of last year’s total tax, or 110% if prior-year AGI was over $150,000, and the IRS will not penalize underpayment even if this year is bigger. That is a penalty shield. It is not a coupon. The rest still shows up on the return. First-year 1099 after a $0-tax year has no useful safe harbor — pay toward 90% of this year’s tax.

A W-2 job can cover a small side hustle through W-4 Step 4(c) extra withholding. Once the 1099 is the job, use Direct Pay or EFTPS on the four dates. An extension to file is not an extension to pay.

Do not

Send the IRS your gross Stripe deposits

Net profit is after software, ads, contractor 1099s, and the home-office optional simplified method. Overpaying estimated tax is an interest-free loan. Underpaying is a penalty plus a spring cash crunch.

Also do not

Skip a separate business checking account

Mix personal and business cash and you cannot tell net profit from lifestyle. The calculator wants one number. Your future self wants one statement.

SEP vs solo 401(k): the 20% trap

Headline “25% of compensation, up to $72,000” is the employee version. For a sole proprietor the circular math (contribution reduces the compensation it is based on) works out to 20% of net profit after the half-SE-tax deduction. A $80,000 Schedule C is about a $14,900 SEP, not $20,000, and nowhere near $72,000. You only kiss the 415(c) cap around $360,000 of compensation.

A solo 401(k) (one-participant plan, spouse allowed) adds the $24,500 employee deferral — and catch-up — on top of that same 20% employer piece. On $80,000 of profit a 40-year-old can put roughly $39,000 away pre-tax versus ~$15,000 in a SEP. That is the whole argument for most people still under six figures of net.

Open a solo 401(k) by December 31 of the year you want the employee deferral. Employer (profit-sharing) money can wait until the filing deadline including extensions, same as a SEP.
A SEP can be opened in 2027 for 2026 if you extend. That is the one reason a SEP still wins: you forgot, and it is March. In September 2026 a 2025 SEP is still open only if Form 4868 was in — October 15, 2026. Hours left: IRA / SEP deadline tool.
Roth deferrals exist in a solo 401(k). They do not cut this year’s tax. They do not exist in a SEP.
A leftover SEP IRA is a traditional IRA for the backdoor Roth pro-rata rule. Empty it into the solo 401(k) if you still want a clean backdoor.
Employees (other than a spouse) generally kill the “solo” plan and force coverage in a SEP. Do not hire your first employee into a plan you have not read.

S-corp payroll is a different calculator: SE tax only hits the W-2 salary, the 20%/25% employer contribution is of W-2 wages, and a “reasonable salary” is an IRS fact question. This classroom models Schedule C / single-member LLC default. Incorporating at $40,000 of profit to “save SE tax” usually costs more in payroll than it saves.

Where extra dollars go after tax is funded

The 1099 order of operations is the W-2 stack with the boss removed: cash buffer sized for lumpy invoices, high-APR debt, then the solo 401(k) or SEP, then IRA/Roth if MAGI allows, then taxable. Health insurance is often the silent killer — marketplace vs a spouse’s plan vs an HSA HDHP. QBI does not replace an emergency fund.

If you still have a W-2, capture that match first. The side hustle plan does not replace a 50% return sitting in payroll. Deferrals across a W-2 401(k) and a solo 401(k) share the $24,500 employee cap.

Related decisions

W-2 withholding still uses the stub and the W-4. Catch-up at 50+ is here. A SEP you forget about will poison a later backdoor. None of this is entity-selection advice — a CPA looks at state tax, health, and whether you actually have employees.

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