Self-Employment Tax in Mississippi (2026)

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

Self-employed people in Mississippi 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. A flat individual income tax (being phased down) applies at the state level.

Quick Answer

SE tax rate
15.3% (12.4% Social Security + 2.9% Medicare)
Threshold
Owe SE tax if net self-employment earnings are $400 or more
Taxable base
92.35% of net self-employment income
Form
Schedule SE, filed with Form 1040
Estimated tax
Quarterly Form 1040-ES payments (Apr, Jun, Sep, Jan)
Mississippi income tax
a flat individual income tax (being phased down)

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 Mississippi, the SE tax is federal and identical to every other state's; what varies is state income tax.

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.

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. See the IRS self-employment tax page for the governing rules.

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 on the IRS materials for the tax year you are filing.

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 income tax.

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. In Mississippi, remember you may also owe state estimated payments; see Mississippi LLC tax filing and business tax basics.

Mississippi State Income Tax on Self-Employment

Mississippi imposes a flat individual income tax that is being reduced under a multi-year phase-down; your business profit is taxed on the Mississippi individual return in addition to federal SE tax. Confirm the current rate with the Department of Revenue.

State income tax is calculated on your business profit as part of your personal return; it is not a second "self-employment tax." Track both federal SE tax and any Mississippi income tax when you plan estimated payments. Our self-employment tax calculator can help you estimate the federal portion before layering on state tax.

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.

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 election uses Form 2553. It is not automatically worth it at lower profit levels. Weigh it against the added complexity, and consider professional advice before electing.

Frequently Asked Questions

What is the self-employment tax rate in Mississippi?

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

When do I owe self-employment tax?

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.

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

More Mississippi business guides

Form an LLC Business License Dissolve an LLC Annual Report Articles of Organization Business Entity Search Certificate of Formation DBA Filing LLC Tax Filing Operating Agreement Registered Agent LLC Cost

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. Mississippi Department of Revenue - business and tax registration.
  14. Mississippi Department of Revenue - Individual income tax.

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 the IRS and Mississippi Department of Revenue and the IRS before acting.