Methods for Computing Self-Employment Tax (continued)

Regular Method Step 3: Determine Self-Employment Tax

The third step is to determine the actual tax. Use these formulas to determine a taxpayer's self-employment tax:

• Net earnings x .124 = Social Security tax (see Tip below)
• Net earnings x .029 = Medicare tax
• Social Security tax + Medicare tax = Self-employment tax

Total earnings (including wages and net income from self-employment) subject to Social Security tax cannot exceed the maximum amount for the tax year. For 2026, the maximum amount of taxable earnings is $184,500.