2026 Tax Year · United States

1099 Tax Calculator Guide: How Self-Employment Tax Actually Works

If you're paid on a 1099, you don't have an employer quietly handling payroll taxes for you. Here's exactly what you owe, why, and how to estimate it in under a minute.

Who this is for

Freelancers, independent contractors, gig workers, and single-member LLCs taxed as sole proprietors. If you receive Form 1099-NEC (or 1099-K) instead of a W-2, this applies to you.

The two taxes you owe

As a 1099 worker your federal liability has two distinct parts:

  1. Self-Employment (SE) tax — your version of payroll tax. It funds Social Security and Medicare. W-2 employees split this 50/50 with their employer; you pay both halves.
  2. Federal income tax — applied to your taxable income using progressive brackets, just like a W-2 worker.

Step 1 — Net profit

Start with gross 1099 income and subtract legitimate business expenses (software, mileage, home office, etc.). What's left is your net profit, and that's the number every tax below is calculated from.

Net Profit = Gross Income − Business Expenses

Step 2 — Self-Employment tax (2026)

SE tax is calculated on 92.35% of net profit (the IRS lets you skip the employer-half equivalent first). The combined rate is 15.3%:

  • Social Security: 12.4% on earnings up to $184,500 (2026 wage base)
  • Medicare: 2.9% on all earnings (no cap)
  • Additional Medicare: 0.9% on earnings above $200,000
SE Base   = Net Profit × 0.9235
SS Tax    = min(SE Base, $184,500) × 12.4%
Medicare  = SE Base × 2.9%
Add'l Med = max(0, SE Base − $200,000) × 0.9%
SE Tax    = SS + Medicare + Additional Medicare

Step 3 — Federal income tax

You then subtract half your SE tax and the 2026 standard deduction ($16,100 single filer) to get taxable income, and apply the progressive brackets:

Taxable Income = Net Profit − (SE Tax / 2) − $16,100

10%  on the first $12,400
12%  up to  $50,400
22%  up to  $105,700
24%  up to  $201,775
32%  up to  $256,225
35%  up to  $626,350
37%  above $626,350

Worked example: $100,000 net profit

  • SE base: $100,000 × 0.9235 = $92,350
  • SE tax: $92,350 × 15.3% = ≈ $14,130
  • Half-SE deduction: ≈ $7,065
  • Taxable income: $100,000 − $7,065 − $16,100 = $76,835
  • Federal income tax (bracketed): ≈ $11,861
  • Total federal tax: ≈ $25,991
  • Take-home: ≈ $74,009

Why quarterly estimates matter

The IRS expects this in four payments (April, June, September, January). Skip them and you'll owe an underpayment penalty even if you settle up in April. A reasonable rule of thumb: set aside 25–30% of every 1099 payment in a separate account.

Try the calculator

Plug your gross income and business expenses into the Contractor Net Pay calculator to see your 2026 SE tax, federal income tax, and monthly take-home in real time. No signup, no email.

This guide is informational and uses 2026 federal rules for single filers. State taxes, business deductions like QBI, and retirement contributions can meaningfully change your final number — talk to a CPA for filing decisions.