SECA tax is the Social Security and Medicare tax that self-employed people pay on their own net earnings under the Self-Employment Contributions Act. The combined rate is 15.3 percent, and for 2026 the Social Security portion applies to the first $184,500 of earnings.1Social Security Administration. Contribution and Benefit Base Because you have no employer to split payroll taxes with, you cover both halves yourself.
Who Owes SECA Tax
You owe SECA tax if your net earnings from self-employment reach $400 or more in a tax year.2Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) That threshold catches sole proprietors, freelancers, independent contractors, and partners who actively participate in a trade or business. Full-time work, side gigs, and every industry in between are treated the same once you cross $400.
One boundary worth flagging: some workers who look self-employed are classified as statutory employees, and the business paying them withholds Social Security and Medicare tax through FICA. This covers four specific categories, including full-time life insurance agents who sell primarily for one company, certain commission delivery drivers, certain home workers using materials the payer supplies, and full-time traveling salespeople writing orders for a single firm.3Internal Revenue Service. Statutory Employees If you meet the IRS conditions for one of these categories, you do not file Schedule SE for that income.
How the 15.3 Percent Rate Breaks Down
SECA has two pieces:
- Social Security (Old-Age, Survivors, and Disability Insurance): 12.4 percent of net self-employment earnings, up to the $184,500 wage base for 2026. Earnings above the cap are not subject to this portion.1Social Security Administration. Contribution and Benefit Base
- Medicare (Hospital Insurance): 2.9 percent of all net self-employment earnings, with no cap.4Office of the Law Revision Counsel. 26 USC Ch. 2 – Tax on Self-Employment Income
An employee pays half of each rate through FICA and the employer matches it. Under SECA you pay the whole 15.3 percent yourself.5Social Security Administration. What Are FICA and SECA Taxes?
Additional Medicare Tax for Higher Earners
An extra 0.9 percent Medicare tax applies to self-employment income above these thresholds:6Internal Revenue Service. Questions and Answers for the Additional Medicare Tax
- Single or head of household: $200,000
- Married filing jointly: $250,000
- Married filing separately: $125,000
Only the earnings above the threshold are subject to the surcharge, not your entire income.7Internal Revenue Service. Topic No. 560 – Additional Medicare Tax
If You Also Have W-2 Wages
The $184,500 Social Security wage base is a combined limit across your W-2 wages and net self-employment earnings. If your employer already withholds Social Security tax on wages that reach the cap, none of your self-employment income is subject to the 12.4 percent portion. If your wages fall short of the cap, only the gap up to $184,500 gets hit by the 12.4 percent rate on Schedule SE. The 2.9 percent Medicare portion still applies to all of your net self-employment earnings regardless of wages.8Social Security Administration. If You Are Self-Employed
Calculating What You Owe
The math on Schedule SE runs in a fixed order.
Step 1. Find your net profit. Sole proprietors report net profit or loss on Schedule C (Form 1040).9Internal Revenue Service. About Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship) Partnership income comes in through Schedule K-1. Subtract ordinary and necessary business expenses from gross business income to get your net figure.
Step 2. Multiply by 92.35 percent. Only 92.35 percent of net profit is subject to SECA tax.10Internal Revenue Service. Topic No. 554 – Self-Employment Tax Schedule SE handles this on Line 4a.
Step 3. Apply the rates. Multiply the result by 12.4 percent (up to the $184,500 wage base) and by 2.9 percent (no cap), then add the two. If your income clears the Additional Medicare Tax threshold for your filing status, add 0.9 percent on the amount above that threshold.
Step 4. File Schedule SE. Enter the figures on Schedule SE (Form 1040). The Social Security Administration also uses this schedule to credit your earnings toward future benefits.11Internal Revenue Service. About Schedule SE (Form 1040), Self-Employment Tax
The Half Deduction
Because you cover both the employee and employer shares, you can deduct one-half of your SECA tax when calculating adjusted gross income.10Internal Revenue Service. Topic No. 554 – Self-Employment Tax This is an above-the-line deduction, so you take it whether or not you itemize. It does not reduce the SECA tax itself; it lowers the income your regular income tax is calculated on. You compute it on Schedule SE and report it on Schedule 1 (Form 1040).
How and When to Pay
You attach Schedule SE to your Form 1040 (or Form 1040-SR) at filing time, and the SECA amount flows to Schedule 2.12Internal Revenue Service. Instructions for Schedule SE (Form 1040) Nobody withholds tax from self-employment income for you, so the IRS expects quarterly estimated payments on Form 1040-ES that cover both your income tax and your SECA tax.13Internal Revenue Service. Estimated Taxes You can pay online, by phone, through the IRS2Go app, or by mail. The four due dates for tax year 2026:14Internal Revenue Service. 2026 Form 1040-ES
- 1st quarter: April 15, 2026
- 2nd quarter: June 15, 2026
- 3rd quarter: September 15, 2026
- 4th quarter: January 15, 2027
Weekend or holiday deadlines shift to the next business day. You can skip the January 15 payment if you file your 2026 return and pay the full balance by February 1, 2027.14Internal Revenue Service. 2026 Form 1040-ES
Safe Harbor Rules
You avoid the underpayment penalty if any of these are true:15Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty
- You owe less than $1,000 when you file.
- You paid at least 90 percent of the tax shown on your current-year return.
- You paid at least 100 percent of the tax shown on your prior-year return. If your prior-year adjusted gross income was over $150,000 ($75,000 if married filing separately), that threshold rises to 110 percent.
Meeting any single test protects you even if your payments fell short of what you ultimately owe. The prior-year safe harbor is useful when income fluctuates because it gives you a fixed target.
Penalties for Missing a Deadline
Penalties on a return that includes SECA tax can stack.
- Failure to file: 5 percent of the unpaid tax per month or partial month, capped at 25 percent.16Internal Revenue Service. Failure to File Penalty
- Failure to pay: 0.5 percent of the unpaid tax per month, also capped at 25 percent. The rate drops to 0.25 percent per month once an approved IRS payment plan is in effect.17Internal Revenue Service. Failure to Pay Penalty
- Underpayment of estimated tax: interest on each quarter’s shortfall. The rate is set quarterly and is 7 percent, compounded daily, for the first quarter of 2026.18Internal Revenue Service. Quarterly Interest Rates
The failure-to-file penalty is ten times larger per month than the failure-to-pay penalty, so file on time even if you cannot pay the full balance.
What SECA Buys You
Every dollar of SECA tax builds credits toward Social Security retirement and disability benefits. In 2026, you earn one credit for every $1,890 in covered net earnings, up to four credits per year (which takes $7,560 in earnings).19Social Security Administration. Social Security Credits Retirement benefits require 40 credits, roughly ten years of work. Failing to report self-employment income or pay SECA tax means those credits do not accrue, which can reduce or eliminate later eligibility.
Exemptions
Two narrow exemptions let certain people opt out of SECA entirely, and both require giving up the Social Security and Medicare benefits the tax funds.
Members of Recognized Religious Groups
If you belong to a recognized religious group that has existed continuously since December 31, 1950, is conscientiously opposed to public or private insurance (including Social Security and Medicare), and provides a reasonable standard of living for its dependent members, you can apply on Form 4029.20Internal Revenue Service. Form 4029 – Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits You are ineligible if you have already received Social Security benefits, unless you first repay them.
Ministers and Religious Practitioners
Ordained, commissioned, or licensed ministers, members of religious orders who have not taken a vow of poverty, and Christian Science practitioners can apply on Form 4361. You must personally oppose accepting public insurance benefits on religious or conscientious grounds and must have told your ordaining or licensing body so.21Internal Revenue Service. Minister and Religious Waiver Program Form 4361 must be filed by the due date (including extensions) of the income tax return for the second tax year in which you had at least $400 of self-employment income from ministerial services. A late filing is automatically disapproved.
Totalization Agreements
If you are covered by a social security agreement between the United States and another country, your self-employment income may be exempt from SECA tax to the extent it is subject to the other country’s system instead.4Office of the Law Revision Counsel. 26 USC Ch. 2 – Tax on Self-Employment Income