Self-employed
What you owe and what you have to pay now
Those are two different numbers, and the second one is usually smaller. Here is your self-employment tax, your income tax, and what to send the IRS each quarter.
Revenue minus business expenses — Schedule C line 31. Not the total on your 1099s.
2025 Form 1040, line 24. Usually lowers what you must pay.
Send in every quarter
$14,983 for the year, in four equal payments
- Self-employment tax (15.3% of $73,880)
- $11,303.64
- social security $9,161.12 · Medicare $2,142.52
- Federal income tax
- $5,343.82
- on $46,599 taxable — after the $16,100 standard deduction, half your SE tax and a $11,650 QBI deduction
- Tax you will owe
- $16,647.46
Set aside about 20.8% of every payment you receive for federal tax.
| Payment | Covers | Due | Amount |
|---|---|---|---|
| 1 | January 1 – March 31 | April 15, 2026 | $3,745.68 |
| 2 | April 1 – May 31 | June 15, 2026 | $3,745.68 |
| 3 | June 1 – August 31 | September 15, 2026 | $3,745.68 |
| 4 | September 1 – December 31 | January 15, 2027 | $3,745.68 |
Equal payments, unequal periods — the second one covers two months and the last covers four. If your income is lumpy, the annualised income instalment method (Publication 505, chapter 2) lets you pay less early and more late.
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The part everyone gets wrong
15.3% is a rate, not a bill
Self-employment tax is the two halves of social security and Medicare that an employer would normally split with you. You pay both halves — that part of the folklore is true. What is not true is that you pay 15.3% of your profit.
Form 1040-ES makes you multiply profit by 92.35% first, because the employer's half is not something you earned. On $100,000 of profit that is the difference between $15,300 and $14,130. Then half of what is left comes off your income before income tax is computed, so the same dollar of self-employment tax quietly reduces your income tax as well.
Step one
Profit × 92.35% — the worksheet's line 3. Everything else runs off that number, not off your profit.
Step two
12.4% social security up to $184,500, plus 2.9% Medicare with no ceiling at all.
Step three
Half of the result is deducted above the line, which lowers the income tax computed in the next step. The two taxes are not independent.
Worked amounts
Federal tax on a year of profit
| Net profit | Self-employment tax | Income tax | Total | Each quarter | Effective |
|---|---|---|---|---|---|
| $25,000 | $3,532 | $571 | $4,103 | $923 | 16.4% |
| $50,000 | $7,065 | $2,667 | $9,732 | $2,190 | 19.5% |
| $75,000 | $10,597 | $4,898 | $15,495 | $3,486 | 20.7% |
| $100,000 | $14,130 | $8,235 | $22,365 | $5,032 | 22.4% |
| $150,000 | $21,194 | $16,413 | $37,608 | $8,462 | 25.1% |
| $250,000 | $29,573 | $46,572 | $76,424 | $17,195 | 30.6% |
Single filer, no other income, standard deduction of $16,100, the 20% QBI deduction applied, no prior-year return on file so the quarterly figure is 90% of the year's tax. No state tax — see below.
Owe versus pay
The number you must send is the smaller of two
Form 1040-ES does not ask you to prepay your tax bill. It asks you to prepay the smaller of 90% of this year's tax and 100% of last year's — 110% if last year's AGI was over $150,000. Meet that and no penalty applies, even if you end up owing a great deal more in April.
This matters most in a good year. If last year's total tax was $9,000 and this year you are on course for four times that, your required payments are still based on the $9,000 — the difference stays in your account until you file. It also cuts the other way: in a year that is worse than the last one, 90% of this year's tax is the smaller number and the one to use.
The calendar
The four payments are not quarters
| Payment | Income earned | Due |
|---|---|---|
| 1 | January 1 – March 31 | April 15, 2026 |
| 2 | April 1 – May 31 | June 15, 2026 |
| 3 | June 1 – August 31 | September 15, 2026 |
| 4 | September 1 – December 31 | January 15, 2027 |
Three months, then two, then three, then four. The instalments are equal but the periods are not, which is the single most common way a first year of self-employment goes wrong: money earned in June is not due until September, and money earned in September is not due until the following January. The last payment can be skipped altogether if you file your return and pay in full by February 1, 2027.
Questions
How much should I set aside from each 1099 payment?
For most sole traders somewhere between 20% and 30% of profit covers federal tax — but the honest answer is that it depends on your profit, and the range above is why. On $50,000 of profit the total federal bill is about 19.46% of it; on $150,000 it is about 25.07%. Put your own number in the calculator and use the set-aside figure it gives you. And set it aside from profit, not revenue — expenses come off first.
Is self-employment tax really 15.3%?
The rate is 15.3%, but it is not applied to your profit. Only 92.35% of net profit counts as net earnings from self-employment (Form 1040-ES, Self-Employment Tax and Deduction Worksheet, line 3), so the real cost on $100,000 of profit is $14,130, not $15,300. Then half of that comes off your income before income tax is figured, which knocks off more. Anyone quoting a flat 15.3% of profit is overstating your bill twice over.
What happens if I skip a quarterly payment?
The penalty is interest, charged per underpayment for the number of days it stays unpaid — not a flat fine, and not a reason to panic if you are a few weeks late. Form 1040-ES puts it plainly: a penalty may apply if you did not pay enough or did not pay on time. It can be waived in certain circumstances; the Instructions for Form 2210 have the conditions.
I also have a job. Do I still need to pay quarterly?
Often not. Withholding from a job counts towards the same requirement, and the simplest fix for a modest side business is usually to file a new Form W-4 and have your employer take more out, rather than remember four dates. Enter your wages and withholding above and the calculator will tell you whether anything is left to pay.
What is the safe harbour, and why does everyone mention last year?
Because it is the only figure you can know exactly in advance. You are not required to prepay what you will owe — you are required to prepay the smaller of 90% of this year's tax and 100% of last year's total tax (110% if last year's AGI was over $150,000). If you are having a much better year than last, paying last year's number is both legal and far cheaper during the year. You still owe the rest, but not until you file.
Do I owe anything if my business made very little?
Two separate floors. Self-employment tax starts once net earnings reach $400 — that is $433 of profit, because of the 92.35% haircut. Estimated payments only become required when you expect to owe at least $1,000 after withholding and credits.
Are the four payments quarterly?
They are equal, but the periods are not. Publication 505 Table 2-1 sets them at three months, two months, three months and four months: January–March due 15 April, April–May due 15 June, June–August due 15 September, and September–December due 15 January of the next year. The June payment covers the shortest stretch and the January one covers the longest, which is why summer income has a habit of arriving at the wrong moment.
Where these figures come from
- Form 1040-ES (2026), rev. Feb 12 2026 — rate schedules, standard deduction, SE tax worksheet, safe harbour · read 2026-08-22
- Publication 505 (2026), rev. Mar 31 2026 — Table 2-1 payment periods · read 2026-08-22
- Form 8959 — Additional Medicare Tax thresholds (statutory, not indexed) · read 2026-08-22
- Rev. Proc. 2025-32 §3.26 — 2026 section 199A threshold and phase-in amounts · read 2026-08-22
What this page deliberately does not do
- State tax. Our state layer models employer withholding tables, and a self-employed filer has no employer. State estimated tax is a separate filing with its own rules and its own dates, and we will not approximate it with the wrong document.
- Married filing separately. It has its own rate schedule, its own $75,000 safe-harbour line and its own Additional Medicare threshold. None of them are applied here.
- Section 199A above the threshold. Past $201,750 of taxable income ($403,500 filing jointly) the deduction depends on W-2 wages, property and whether yours is a specified service trade. The calculator stops offering a number there rather than printing a wrong one.
- Capital gains, the net investment income tax, age-65 deductions, and the annualised instalment method for lumpy income. All real, none modelled.
Federal figures for tax year 2026, transcribed from the IRS documents listed above with the date each was last opened. Estimates only — not tax advice.