Self-Employment Tax 2027: Rates and Social Security Wage Base

The 2027 Social Security wage base is $192,300, confirmed in SSA’s 2027 COLA fact sheet, checked October 22, 2026. Regular self-employment tax combines 12.4% Social Security with 2.9% Medicare: 15.3% while earnings remain below the Social Security cap.

This guide concerns income earned in tax year 2027, generally reported in 2028. For 2026 income reported in 2027, use our 2026 self-employment tax guide.

2027 Social Security wage base

The cap applies to covered earnings, not gross invoices. Social Security-covered W-2 wages use the cap first, leaving less room for the Social Security portion of SE tax. Medicare continues above the cap. SSA lists the 2026 cap as $184,500; the 2027 cap is $7,800 higher. Sources: SSA fact sheet and IRS Topic 554.

How to calculate self-employment tax for 2027

For a typical sole proprietor using the regular method:

1. Subtract deductible business expenses from revenue to find business profit.
2. Multiply profit by 92.35% to calculate net earnings for this estimate.
3. Multiply the smaller of those earnings or the remaining $192,300 Social Security cap by 12.4%.
4. Multiply all those earnings by 2.9% for regular Medicare, then add the two taxes.

The general $400 floor refers to net self-employment earnings, not gross receipts; it is not a $400 deduction. Special rules and optional methods can apply. See IRS Topic 554 and the applicable Schedule SE instructions before filing.

Worked examples: $50,000, $100,000 and $200,000 profit

Assumptions: single filer, no W-2 wages or other earned income, ordinary sole-proprietor profit after business expenses, regular method, and no special exemptions. Amounts below are calculated from unrounded earnings and displayed to cents. They exclude federal income tax and state taxes.

At $50,000 profit, $50,000 × 0.9235 = $46,175; multiplying by 0.153 gives $7,064.775, or $7,064.78 rounded. At $100,000 profit, $92,350 × 0.153 = $14,129.55. At $200,000 profit, $184,700 × 0.153 = $28,259.10. All three earnings amounts remain below the 2027 cap.

The $200,000 example does not incur Additional Medicare Tax under these assumptions: its $184,700 of net earnings is below the single-filer threshold. Different filing status or wages can change that result.

To see the cap in action, consider $250,000 profit with the same assumptions: net earnings are $230,875. Social Security stops at $192,300 × 12.4% = $23,845.20; regular Medicare is $6,695.38, giving $30,540.58 regular SE tax. Additional Medicare is separate: ($230,875 − $200,000) × 0.9% = $277.88. The combined amount, rounded after adding unrounded components, is $30,818.45; displayed rounded components can differ by a cent.

0.9% Additional Medicare Tax

Under IRS Topic 560, the additional rate applies above $200,000 for single, head-of-household and qualifying surviving-spouse filers; $250,000 for married filing jointly; or $125,000 for married filing separately.

If you also receive Medicare wages, those wages reduce the threshold available for self-employment income, no lower than zero. Joint filers must account for both spouses’ relevant income. Use Form 8959 for the calculation; railroad retirement compensation has separate coordination rules. See our Additional Medicare guide.

Using the SE tax calculator

The self-employment tax calculator currently uses 2026 rules and the $184,500 cap. It has no 2027 toggle; do not treat its result as a 2027 estimate. Use the worked calculations above for these 2027 scenarios. In particular, the $200,000-profit example crosses the 2026 cap but stays below the 2027 cap.

Regular SE tax is separate from income tax. Half of regular SE tax is generally deductible when figuring adjusted gross income; that deduction does not reduce the SE tax itself. Background: the deductible half of SE tax. The examples are not estimates of your entire tax bill.

FAQ

Sources

• SSA: 2027 COLA fact sheet, maximum taxable earnings
• IRS Topic 554, Self-employment tax
• IRS Topic 560, Additional Medicare tax