FlagSageSelf-employment tax
Glossary term
Self-employment tax is the US Social Security and Medicare tax that self-employed people pay on net earnings of $400 or more, at a rate the IRS gives as 15.3%.
The IRS says the rate is made up of 12.4% for social security and 2.9% for Medicare. For 2026, the social security part applies to the first $184,500 of combined wages, tips and net earnings, while the Medicare part applies to all net earnings, with an Additional Medicare Tax of 0.9% above thresholds set by filing status. The tax is figured on Schedule SE.
It follows US citizens and residents abroad. Publication 54 says self-employment income excluded from income tax under the foreign earned income exclusion must still be counted when figuring net earnings from self-employment. A totalization agreement can assign coverage to the other country, and as a general rule a self-employed person covered by one pays only in the country of residence.
See self-employment tax abroad for agreement countries and certificates of coverage.
Not to be confused with
- Foreign earned income exclusion. The exclusion reduces income tax only and does not reduce self-employment tax.
- Totalization agreement. The agreement decides which country's social security applies; self-employment tax is the US charge it can switch off.
Sources
- Self-employment tax (Social Security and Medicare taxes)Official guidance
- Publication 54 (12/2025), Tax Guide for U.S. Citizens and Resident Aliens AbroadOfficial guidance
- Instructions for Schedule SE (Form 1040) (2026)Official guidance
Related
- Countries covered
- General
- Sources
- 3 sources
- Tax year
- Current rules as checked
- Review
- Not professionally reviewed
Sources checked November 9, 2026