Self-Employment Tax in Virginia: Rates and Payments (2026)

Fact-checked by the LegalGlass editorial team against primary sources · Published Aug 20, 2026 · Last updated Aug 20, 2026

Self-employment tax is a federal tax, not a Virginia one. The rate is 15.3% - 12.4% for Social Security and 2.9% for Medicare - applied to 92.35% of net earnings from self-employment and computed on Schedule SE. Virginia imposes no separate self-employment tax, but self-employed Virginians owe Virginia income tax and usually quarterly estimated payments.

What Self-Employment Tax Is

Self-employment tax is the Social Security and Medicare contribution that a self-employed person pays in place of the payroll taxes an employer and employee would otherwise split. It is entirely federal. The IRS sets the rate at 15.3%, made up of 12.4% for Social Security - old-age, survivors, and disability insurance - and 2.9% for Medicare, or hospital insurance.

It is separate from income tax. A Virginia freelancer with a profitable year owes federal income tax, self-employment tax, and Virginia income tax on the same dollars, computed three different ways. Confusing SE tax with income tax is the most common reason a first-year business owner is caught short in April. See the national self-employment tax guide.

Who Owes It in Virginia

You owe SE tax if you carry on a trade or business as a sole proprietor or independent contractor, are a partner in a partnership carrying on a trade or business, or are a member of an LLC treated as one of those. A single-member LLC is a disregarded entity by default, so its owner reports on Schedule C and pays SE tax exactly as a sole proprietor would.

Forming an LLC in Virginia does not by itself change this. Liability protection and tax classification are separate questions: the Articles of Organization create the entity, while the IRS determines how it is taxed. See how to form an LLC in Virginia and what an LLC is.

How the Calculation Works

SE tax is not applied to your gross revenue or even to your full net profit. Generally the amount subject to SE tax is 92.35% of net earnings from self-employment - the adjustment approximates the employer-side deduction an employee's wages would receive. You compute the figure on Schedule SE (Form 1040), using net profit from Schedule C.

The Social Security portion applies only up to the annual wage base, which is $184,500 for 2026; earnings above that are subject to the Medicare portion only. If you also had W-2 wages subject to Social Security tax during the year, those wages count first against the base, so you may owe less of the 12.4% component than the raw math suggests. The 2.9% Medicare portion has no ceiling. Try the SE tax calculator to see the shape of it.

The Deduction for Half of SE Tax

Self-employed taxpayers may deduct the employer-equivalent portion - roughly half - of self-employment tax in figuring adjusted gross income. This is an above-the-line deduction, so you take it whether or not you itemize. It reduces income tax; it does not reduce the SE tax itself.

Because Virginia's individual income tax starts from federal adjusted gross income, this federal deduction flows into the Virginia calculation as well. That is the main way SE tax indirectly affects a Virginia return - Virginia never imposes SE tax directly. Keep the Schedule SE worksheet with your records; the deduction is one of the more commonly missed items on a self-prepared return.

Virginia Income Tax on Self-Employment Income

Virginia has no separate self-employment tax. What it has is a graduated individual income tax that applies to your business profit along with the rest of your income. Virginia's rate schedule is progressive and tops out at 5.75% of taxable income above the highest bracket threshold. Business profit from a sole proprietorship, a partnership, or a pass-through LLC lands on your Virginia individual return.

Because there is no withholding on self-employment income, Virginia expects payment as you earn. Nothing about forming a Virginia LLC removes that obligation, and nothing about it creates a Virginia SE tax. See Virginia LLC tax filing and the business tax hub for how the entity-level filings fit alongside your personal return.

Virginia Estimated Payments: Form 760ES

Virginia requires estimated payments from individuals whose Virginia income tax liability, after subtracting tax withheld and allowable credits, is expected to be more than $1,000. Those payments are made with Form 760ES. Missing them produces an underpayment addition even if you pay the full balance when you file.

Virginia also imposes an electronic payment requirement: for payments made on and after July 1, 2022, individuals must submit all income tax payments electronically if any single payment exceeds $1,500 or if the sum of all payments is expected to exceed $6,000. Set up an online account before your first due date rather than discovering the requirement on the deadline.

Federal Estimated Payments

Federally, the same pay-as-you-earn principle applies through Form 1040-ES. Estimated payments cover federal income tax and self-employment tax together, and they are ordinarily due four times a year - in April, June, September, and the following January. Underpayment triggers a penalty computed by period, so paying everything in a lump at year end does not cure a missed spring quarter.

A practical method is to move a fixed percentage of every deposit into a separate tax account, sized to cover federal income tax, the 15.3% SE tax, and Virginia income tax. Recalculate mid-year if profit is running well above or below plan. Owners who budget only for income tax are the ones most often surprised, because SE tax alone can rival the income tax bill at moderate profit levels.

Reducing SE Tax: the S-Corp Election

The main structural lever is the S-corp election. Under it, an owner-employee is paid a reasonable salary subject to employment taxes, and remaining profit distributed to the owner is not subject to self-employment tax. The election is federal, made on IRS Form 2553, and it does not change your Virginia entity or its registered agent obligation.

It is not free. The election brings payroll filings, a separate Form 1120-S, higher accounting costs, and exposure on the reasonable-compensation question, which is a well-known audit issue. It generally pays only once profit comfortably exceeds a reasonable salary for the work performed. Read S-corp vs LLC before deciding, and note that ordinary deductible business expenses reduce net profit and therefore reduce SE tax without any structural change at all. If you are just starting, see how to get an EIN, Virginia business licenses, and the licensing overview.

Frequently Asked Questions

Does Virginia have a self-employment tax?

No. Self-employment tax is federal only, at 15.3% - 12.4% Social Security plus 2.9% Medicare. Virginia imposes no separate self-employment tax. Virginia does tax self-employment income through its individual income tax, and it expects estimated payments when your Virginia liability will exceed $1,000.

What is the self-employment tax rate in 2026?

15.3% overall: 12.4% for Social Security and 2.9% for Medicare. Generally the amount subject to the tax is 92.35% of your net earnings from self-employment. The Social Security portion applies only up to the wage base, which is $184,500 for 2026; the Medicare portion has no cap.

When do I have to make Virginia estimated tax payments?

When your expected Virginia income tax liability, after subtracting tax withheld and allowable credits, is more than $1,000. Use Form 760ES. Virginia also requires payments to be made electronically if any single payment exceeds $1,500 or total payments are expected to exceed $6,000.

Do I pay self-employment tax on LLC income in Virginia?

Usually yes. A single-member LLC is a disregarded entity by default, so its owner reports on Schedule C and pays self-employment tax like a sole proprietor. Members of a multi-member LLC taxed as a partnership generally owe it on their distributive share of trade or business income.

Can I deduct self-employment tax?

You can deduct the employer-equivalent portion - roughly half - of self-employment tax in figuring adjusted gross income. It is an above-the-line deduction available whether or not you itemize. It lowers income tax, not the self-employment tax itself, and it flows into the Virginia calculation through federal AGI.

How can I lower self-employment tax legally?

Two ways. Claim every ordinary and necessary business expense, since SE tax is computed on net earnings rather than gross receipts. Or make an S-corp election, which subjects only a reasonable salary to employment taxes - but that adds payroll, a Form 1120-S, and reasonable-compensation risk.

Related

• Self-employment tax (cluster hub)
• Self-employment tax calculator
• How to form an LLC in Virginia
• Virginia LLC tax filing
• S-corp vs LLC
• Single-member LLC basics
• What is an LLC?
• Business tax hub
• How much does an LLC cost?

Sources

1. IRS - Self-Employment Tax (Social Security and Medicare Taxes) (15.3%; 12.4% + 2.9%; 92.35% of net earnings).
2. IRS - Topic no. 554, Self-employment tax (Schedule SE; deduction for half of SE tax).
3. IRS - About Schedule SE (Form 1040).
4. IRS - About Schedule C (Form 1040).
5. IRS - About Form 1040-ES (federal estimated tax).
6. Social Security Administration - Contribution and Benefit Base ($184,500 for 2026).
7. Virginia Tax - Individual Estimated Tax Payments ($1,000 threshold; $1,500/$6,000 electronic payment rule).
8. Virginia Tax - Resources for Individual Taxpayers.
9. Virginia Tax - Form 760ES, Virginia Estimated Income Tax Payment Vouchers.
10. Virginia Tax - Virginia tax rate schedule (top rate 5.75%).
11. IRS - About Form 2553 (S corporation election).
12. IRS - Limited Liability Company (LLC) (default federal tax classification).
13. IRS - Get an Employer Identification Number (EIN) (free; one per responsible party per day).
14. Legal Information Institute - Limited liability company (LLC).

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