Freelancer guides
Self-Employment Tax in the US — What You Actually Owe
The 15.3% self-employment tax, the deduction for half of it, and the quarterly estimated payments that trip up new freelancers.
8 min read · Reviewed March 2026
Why freelancers pay more FICA
When you're an employee, you and your employer split Social Security and Medicare taxes — you pay 7.65%, they pay 7.65%. When you're self-employed, you are both, so you pay the full 15.3% yourself. That's self-employment tax, and it's on top of income tax.
It applies to net self-employment earnings (profit), and the Social Security portion only applies up to the annual wage base, while Medicare applies to all of it.
The deductions that soften it
Two things reduce the sting. First, you only pay self-employment tax on 92.35% of net profit, not the full amount. Second, you can deduct half of your self-employment tax when calculating your income tax — recognising the 'employer half' you effectively paid.
On top of that, ordinary business expenses reduce your profit before any tax applies, which is the single biggest lever freelancers have to lower their bill legitimately.
Quarterly estimated taxes
Because no employer withholds tax for you, the IRS expects you to pay as you go via quarterly estimated payments (roughly April, June, September and January). Skip them and you can face an underpayment penalty even if you pay in full at year-end.
A common rule of thumb is to set aside 25–30% of profit for federal taxes, more if your state taxes income too.
Don't forget state tax
Most states tax self-employment income just like wages, so factor your state in. A freelancer in Texas (no state income tax) keeps more than one in California on the same profit.
Our US freelancer calculator gives a simplified estimate combining self-employment tax and federal income tax — confirm specifics with a CPA.
Related
Frequently Asked Questions
+How much is self-employment tax in the US?
15.3% of net self-employment earnings (12.4% Social Security up to the wage base, 2.9% Medicare on all of it), on top of income tax. You pay it on 92.35% of profit and can deduct half against income tax.
+Do freelancers pay quarterly taxes?
Yes. With no employer withholding, the IRS expects quarterly estimated payments. Setting aside 25–30% of profit (more with state tax) is a common rule of thumb to avoid a year-end shortfall and penalties.
Estimate only — not tax advice. Figures are estimates based on publicly available tax rules and may not reflect your full circumstances. See our methodology & sources (last reviewed June 2026). Always confirm with an official tax authority or a licensed adviser before making decisions.