Generally, 92.35% of net self-employment profit enters the calculation. Social Security wages from other employment also use the annual wage base, which is $184,500 for 2026. Medicare has no ordinary wage cap, and Additional Medicare Tax can apply based on income and filing status.
The deduction for the employer-equivalent portion reduces adjusted gross income for income-tax purposes. It does not reduce the self-employment tax itself.
An example
Hypothetical: with $100,000 of Schedule C profit, no other wages and no Additional Medicare Tax, $92,350 is subject to regular self-employment tax. Multiplying by 15.3% gives $14,129.55, before tax-form rounding.
Reviewed October 7, 2026. IRS reference ↗ Social Security wage base ↗
This is a general reference. Discuss how the rules apply to your business with your tax professional.