Self-Employment Tax in Georgia (2026)

Fact-checked by the LegalGlass editorial team against primary sources · Published Aug 6, 2026 · Last updated Aug 6, 2026

Self-employed people in Georgia pay federal self-employment (SE) tax of 15.3% (12.4% Social Security up to the annual wage base plus 2.9% Medicare) on net earnings, reported on Schedule SE. SE tax funds Social Security and Medicare and is separate from income tax. Georgia adds its own flat individual income tax, being phased down toward 4.99%.

What Self-Employment Tax Is

Self-employment tax is the self-employed person's share of Social Security and Medicare. When you work for an employer, the employer withholds these taxes and pays half. When you work for yourself, you pay both halves, which is why the combined SE tax rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare, under 26 U.S.C. § 1401.

SE tax applies to sole proprietors, partners in a partnership, and members of a multi-member LLC taxed as a partnership. It is separate from income tax: you can owe SE tax even in a year with modest income-tax liability. In Georgia, the SE tax is federal and identical to every other state's; what varies is the Georgia income tax layered on top. If you run an unincorporated business, see sole proprietorship in Georgia for how that profit is treated.

The 12.4% Social Security portion pays into the retirement, survivors, and disability program, while the 2.9% Medicare portion funds hospital insurance. Because you are effectively both employer and employee, the halves that a W-2 worker never sees on a pay stub both fall on you. The offsetting deduction for one-half of SE tax, discussed below, exists precisely so the self-employed are not disadvantaged relative to employees, whose employer share is not counted as taxable wages.

Who Pays and the $400 Threshold

You owe SE tax if your net earnings from self-employment are $400 or more in the year. That includes freelancers, independent contractors, gig workers, sole proprietors, and pass-through LLC members. It does not include wages you earn as an employee, which are already subject to payroll tax withholding by your employer.

An LLC does not change this by itself: a single-member LLC is a disregarded entity whose profit is self-employment income, and a multi-member LLC passes profit to members as self-employment earnings. Electing S-corporation status can change the analysis, discussed below. Most self-employed Georgians also need a federal EIN once they hire or form a partnership.

The $400 figure is a filing trigger for the SE tax itself, not a tax-free allowance: once you cross it, SE tax is computed on the full adjusted base, not only on the amount above $400. Certain income is excluded from net earnings from self-employment under 26 U.S.C. § 1402, such as most rental real estate income and gains from selling business assets. If you have both a job and a side business, your wages count first toward the Social Security wage base, which can reduce the Social Security portion of your SE tax even though the Medicare portion still applies to all net earnings.

How SE Tax Is Calculated

You do not pay SE tax on 100% of your profit. First, multiply net self-employment earnings by 92.35%; that adjusted figure is the SE tax base. Apply 12.4% Social Security up to the annual Social Security wage base, and apply 2.9% Medicare to all of it. High earners also pay an extra 0.9% Additional Medicare Tax above set thresholds.

You then deduct one-half of your SE tax when computing adjusted gross income, which softens the impact. Schedule SE walks through the math. Because the Social Security wage base is indexed each year, confirm the current cap in the IRS materials for the tax year you are filing. Our self-employment tax calculator estimates the federal portion before you layer on Georgia income tax.

Reporting and Paying SE Tax

You report SE tax on Schedule SE, attached to your Form 1040, after computing business profit on Schedule C (sole proprietor) or from your partnership/LLC Schedule K-1. Because no employer withholds for you, you generally must make quarterly estimated payments with Form 1040-ES to cover both SE tax and federal income tax.

Federal estimated payments are due about April 15, June 15, September 15, and January 15. Underpaying can trigger a penalty, so many self-employed people set aside 25–30% of profit for combined federal and state taxes. In Georgia, you must also make state estimated payments on Form 500-ES; see Georgia LLC tax filing and business tax basics.

You generally must pay estimated tax if you expect to owe at least $1,000 in federal tax after withholding and credits. A common safe-harbor approach is to pay either 90% of the current year's tax or 100% of last year's tax (110% if your prior-year adjusted gross income was high), which avoids the federal underpayment penalty even if your income rises. Keep clean records of gross receipts and deductible business expenses on Schedule C, because your net profit – not your gross revenue – is what both SE tax and income tax are computed on. Georgia follows a parallel quarterly schedule, so it is efficient to calculate and remit the federal and state estimates together each quarter.

Georgia State Income Tax on Self-Employment

Georgia imposes a flat individual income tax on your net business income, separate from and in addition to federal self-employment tax. Georgia moved from graduated brackets to a single flat rate that is scheduled to step down over several years toward a target of 4.99%. Confirm the exact rate for your filing year with the Georgia Department of Revenue before you calculate estimates.

State income tax is calculated on your business profit as part of your personal Georgia return, Form 500; it is not a second "self-employment tax." Georgia does not impose its own Social Security or Medicare charge on the self-employed. Track both federal SE tax and Georgia income tax when you plan estimated payments, and remember that Georgia registration with the Secretary of State is separate from tax registration with the Department of Revenue.

Georgia's individual income tax starts from your federal adjusted gross income and then applies Georgia additions, subtractions, and a standard or itemized deduction, so the deductions you claim federally flow into the state calculation. Because the state uses a single flat rate rather than brackets, your marginal and effective state rates on business profit are essentially the same. If you also sell taxable goods or services, Georgia sales and use tax is a distinct obligation collected from customers and remitted to the Department of Revenue; it is not part of self-employment or income tax. Verify the current-year flat rate, standard deduction, and any exemptions with the Department of Revenue before filing, since Georgia has adjusted both the rate and the standard deduction in recent legislative sessions.

Can an S-Corp Election Reduce SE Tax?

A common strategy is electing S-corporation treatment for an LLC. In an S-corp, only the owner's reasonable salary is subject to Social Security and Medicare payroll tax; remaining profit taken as a distribution is not subject to SE tax. That can produce savings once profit is high enough to justify payroll costs. Georgia recognizes the federal S election for entities doing business in the state.

The trade-offs are real: you must run payroll, pay a reasonable salary (the IRS scrutinizes artificially low salaries), and file a separate return. The federal election uses Form 2553. It is not automatically worth it at lower profit levels. Weigh it against the added complexity, review the operating agreement implications, and consider professional advice before electing.

Frequently Asked Questions

What is the self-employment tax rate in Georgia?

The federal self-employment tax rate is 15.3% (12.4% Social Security plus 2.9% Medicare) and is the same in Georgia as everywhere. Georgia income tax is separate: a flat individual income tax being phased down toward 4.99%.

When do I owe self-employment tax in Georgia?

You owe SE tax if your net earnings from self-employment are $400 or more for the year. It applies to sole proprietors, partners, and members of an LLC taxed as a partnership.

How is self-employment tax calculated?

Multiply net self-employment earnings by 92.35%, then apply 12.4% Social Security up to the wage base and 2.9% Medicare on all of it. You deduct half of the SE tax against income.

How do I pay self-employment tax?

Report it on Schedule SE with your Form 1040, and make quarterly estimated payments with Form 1040-ES (around April 15, June 15, September 15, and January 15) since no employer withholds for you.

Does Georgia charge its own self-employment tax?

No. Self-employment tax is federal. Georgia taxes your net business profit through its flat individual income tax, reported on Form 500, with quarterly state estimated payments on Form 500-ES.

Can an S-corp lower my self-employment tax?

Possibly. In an S-corp only your reasonable salary is subject to payroll tax; distributions are not subject to SE tax. It adds payroll and filing costs, so it usually helps only at higher profit.

Related

• Self-employment tax calculator
• Self-employment tax explained
• S-corp vs LLC
• Georgia LLC tax filing
• Single-member LLC in Georgia
• How to form an LLC (cluster hub)
• How to get an EIN
• Business tax basics
• Legal glossary

Sources

1. IRS - Self-Employment Tax (Social Security and Medicare Taxes).
2. IRS - About Schedule SE (Form 1040), Self-Employment Tax.
3. IRS - About Form 1040-ES, Estimated Tax for Individuals.
4. IRS - Estimated Taxes.
5. IRS - Topic No. 751, Social Security and Medicare withholding rates.
6. Cornell LII - 26 U.S. Code § 1401 - Rate of self-employment tax.
7. Cornell LII - 26 U.S. Code § 1402 - Definitions (net earnings from self-employment).
8. IRS - Sole Proprietorships.
9. IRS - Single Member Limited Liability Companies.
10. IRS - S Corporations.
11. IRS - About Form 2553, Election by a Small Business Corporation.
12. IRS - About Publication 334, Tax Guide for Small Business.
13. Georgia Department of Revenue - Individual Taxes (Georgia individual income tax).
14. Georgia Department of Revenue - Form 500 Individual Income Tax Return.
15. Georgia Department of Revenue - Form 500-ES Estimated Tax Payment Voucher.
16. Georgia Secretary of State - Corporations Division (entity registration).

LegalGlass provides general information for educational purposes and is not a law firm or a substitute for advice from a licensed attorney or tax professional. Laws, fees, and thresholds change; verify current requirements with the IRS and the Georgia Department of Revenue before acting.