Do online sellers pay self-employment tax?

Self-employment tax is the Social Security and Medicare tax of people who work for themselves, the counterpart of what is withheld from an employee's pay.^[1] An employer works it out for wage earners; a self-employed seller works it out on Schedule SE.^[1]

• Who owes it. You pay it and file Schedule SE when your net earnings from self-employment are $400 or more.^[1]
• What it is worked out from. A sole proprietor generally figures net earnings from Schedule C, the profit or loss from the business.^[1] For a seller, that is sales less refunds, cost of goods sold, marketplace fees and other business expenses.
• No age limit. The IRS says the rules apply no matter how old you are, even if you already receive Social Security or Medicare.^[1]

Schedule SE turns net profit into net earnings by multiplying it by 92.35%. Under $400 of net earnings, there is no self-employment tax.^[2] The rest is two parts:^[1][2]

• Social Security, 12.4%, on net earnings up to the wage base. For 2026 the base is $184,500, for wages and self-employment earnings combined.^[3][4] Wages from a job use up the base first.
• Medicare, 2.9%, on all net earnings, with no cap.^[1]

Half of the total is a deduction in working out adjusted gross income. It lowers income tax only, not the self-employment tax itself.^[1][2]

Higher earners can also owe the separate Additional Medicare Tax: 0.9% of wages and self-employment income above $200,000 single, $250,000 married filing jointly or $125,000 married filing separately.^[5] It is reported on Form 8959, apart from self-employment tax.^[6] The self-employment tax calculator works all of this out from your own profit.

Nothing is withheld from business profit, so self-employment tax is paid during the year through estimated tax, which covers self-employment tax as well as income tax.^[7] For 2026 you generally have to make estimated payments if you expect to owe at least $1,000 after withholding and refundable credits.^[4]

• How much is enough. The smaller of 90% of your 2026 tax or 100% of your 2025 tax, or 110% of the 2025 tax if your 2025 adjusted gross income was over $150,000 ($75,000 married filing separately).^[4]
• When. April 15, 2026, June 15, 2026, September 15, 2026 and January 15, 2027.^[4]

The quarterly tax calculator turns either figure into the four payments.

Every line above starts from net profit, so self-employment tax is only as right as the books behind it. For an online seller the usual gaps are in the inputs: payouts booked as sales with the fees already taken out, cost of goods sold estimated rather than worked out from inventory, and refunds or reserves left unrecorded. Each one moves profit, and with it the tax on 92.35% of the difference.

Monthly e-commerce bookkeeping keeps sales, fees, refunds and cost of goods sold reconciled to each marketplace, so year-to-date profit is ready for each estimated payment and your tax preparer starts the return from a clean figure.