Schedule SE
Schedule SE: Self-Employment Tax
Schedule SE computes the 15.3% self-employment tax under §1401 on the 2025 Form 1040: the 92.35% base, the $400 filing threshold of §6017, and the above-the-line deduction for half the tax.
The 15.3% on 92.35%
Self-employment tax under §1401 is Social Security plus Medicare — both the employer and employee halves, since you are both. It applies to 92.35% of net self-employment earnings, the rough equivalent of the employer half never hitting your paycheck. Net earnings come from Schedule C (and certain partnership and farm income) before this computation even starts.
The $400 tripwire
Net earnings of just $400 trigger Schedule SE under §6017 — far below the income-tax filing threshold. A small side gig with no income-tax liability can still owe SE tax, and it still needs to be reported. For the full tax-computation walkthrough, see Chapter 4: Tax, Credits, and Payments.
The half-SE deduction
You deduct one-half of the SE tax above the line when computing AGI — the rough equivalent of the employer's share being deductible as a business expense. Employees never see their employer's half in wages; this deduction is your version of the same treatment.
Questions, answered
- Why is SE tax 15.3%?
- You pay both halves — employer and employee — of Social Security and Medicare under §1401, applied to 92.35% of net self-employment earnings.
- At what income do I owe SE tax?
- Net earnings of $400 or more trigger Schedule SE under §6017 — far below the income-tax filing threshold, so side gigs count.
- Do I get any deduction for SE tax?
- Yes — you deduct one-half of the SE tax above the line when computing AGI, the rough equivalent of the employer’s share being deductible.
Keep reading: AGI · Total Income · Schedule D Capital