For most people who work traditional jobs in the United States, Social Security contributions happen automatically. Employers withhold payroll taxes from each paycheck and send them to the government on the employee’s behalf. When you are self-employed, though, that is not the case. You are responsible for tracking income, calculating what you owe, and paying Social Security and Medicare taxes yourself.
Here is what that means for 2026.
Social Security for the Employed
If you work for an employer, Social Security and Medicare taxes are split between you and your employer.
In 2026, employees typically pay:
- 6.2 percent Social Security tax
- 1.45 percent Medicare tax
Employers pay the same amounts on your behalf, which means the total payroll tax rate is:
- 12.4 percent for Social Security
- 2.9 percent for Medicare
For 2026, Social Security tax is only assessed on the first $184,500 of wages. Medicare tax has no income limit, so it applies to all wages.
High earners may also owe an additional Medicare tax. Individuals earning more than $200,000 and married couples earning more than $250,000 generally pay an extra 0.9 percent Medicare tax on earnings above those thresholds.
Social Security Responsibilities for the Self-Employed
Self-employed workers pay both the employee and employer portions because they are effectively both.
In 2026, the self-employment tax rate remains:
- 12.4 percent for Social Security
- 2.9 percent for Medicare
That means the total self-employment tax rate is 15.3 percent on net earnings, up to the Social Security wage base.
Just as employees do, self-employed individuals pay only the Social Security portion on the first $184,500 of earnings in 2026. Medicare tax still applies to all income, with no cap. If your income is high enough, the additional 0.9 percent Medicare tax may also apply.
Business Expenses and the Amount You Owe
One advantage of being self-employed is that you can deduct legitimate business expenses. These deductions reduce your net income, which can lower both your income taxes and your self-employment tax.
It is important to understand the tradeoff. Lower reported income can reduce taxes today, but it may also reduce your Social Security earnings record, which can impact future benefits. Since Social Security benefits are based on your highest 35 years of earnings, the effect depends on your overall career income and where your self-employment income falls within that history.
Deducting Part of Your Self-Employment Tax
Self-employed individuals can also deduct part of their self-employment tax when calculating their income taxes. Specifically, you can deduct the employer-equivalent portion of the tax, which is essentially half of your Social Security and Medicare taxes. This deduction does not reduce your self-employment tax itself, but it can reduce your taxable income.
Reporting Earnings
If you are self-employed and earn $400 or more, you generally must report your earnings and calculate self-employment tax using Schedule SE (Form 1040). Most independent contractors and sole proprietors also report income and expenses using Schedule C.
Takeaway
Social Security taxes are straightforward for traditional employees because withholding is automatic. For self-employed workers, the responsibility is yours, including tracking income, claiming deductions correctly, and paying the full Social Security and Medicare tax rate.
Because self-employment taxes can get complicated, many freelancers and business owners benefit from working with an accountant to ensure they report income accurately and build a long-term strategy that supports both current cash flow and future retirement benefits.