There is no single “1099 tax rate.” Income you are paid as an independent contractor carries two federal taxes, plus your state’s: a flat 15.3% self-employment tax on 92.35% of your profit, and income tax at the same 2026 brackets everyone pays. For a single filer with no other income, that comes to roughly 19% of profit at $40,000, 20% at $60,000 and 22% at $100,000, before state tax. Here is where those numbers come from.
It’s charged on profit, not on what you were paid
A 1099-NEC or 1099-K shows what clients or platforms paid you. Tax is worked out on profit: that income minus your business expenses on Schedule C. $70,000 paid with $10,000 of software, equipment, mileage and fees is $60,000 of profit, and $60,000 is what the rates below apply to. That is why every expense you record lowers the bill twice, once for each tax.
Self-employment tax: the flat part
An employer pays half of an employee’s Social Security and Medicare and withholds the other half. Working for yourself, you pay both halves, as self-employment tax: 15.3% (12.4% Social Security, 2.9% Medicare) on 92.35% of your profit. Effectively about 14.1% of profit.
- The 12.4% Social Security part stops at the 2026 wage base of $184,500, shared with any W-2 wages you also earn.
- The 2.9% Medicare part has no cap, and an extra 0.9% applies above $200,000 ($250,000 married filing jointly).
- It starts once your net self-employment earnings reach $400 for the year.
- Half of it is deductible before income tax, which takes a little off the second part.
Income tax: the bracket part
Income tax comes after three deductions: half the self-employment tax, the 2026 standard deduction ($16,100 single, $32,200 married filing jointly, $24,150 head of household) and, for most self-employed people, the 20% qualified business income deduction. What is left is taxed in slices at the 2026 brackets. For a single filer: 10% up to $12,400, 12% up to $50,400, 22% up to $105,700, 24% up to $201,775, then 32%, 35% and 37%.
Being “in the 22% bracket” only means the top slice is taxed at 22%. And if you also have a job, the 1099 profit stacks on top of your wages, so it is taxed at the higher slices your wages didn’t use.
What it adds up to
| Profit | Self-employment tax | Income tax | Total | Share of profit |
|---|---|---|---|---|
| $40,000 | $5,652 | $1,775 | $7,427 | 18.6% |
| $60,000 | $8,478 | $3,559 | $12,037 | 20.1% |
| $100,000 | $14,130 | $8,235 | $22,365 | 22.4% |
Self-employment tax is the bigger piece at every one of these incomes, which is the part people new to 1099 work leave out. Add your state’s income tax on top: nothing in the nine states without one, several percent in most others. Our free 1099 tax calculator works it out for your own income, expenses, filing status and state, and gives the share of each payment to set aside.
When you pay it
Nobody withholds from a 1099 payment, so the IRS expects the tax through the year, in quarterly estimated payments if you will owe $1,000 or more: April 15, June 15 and September 15, 2026, and January 15, 2027. The simplest way to have the money ready is to move a fixed share of every payment into a separate account the day it lands. The quarterly guide covers the dates and the safe harbor that protects you from the underpayment penalty.
Questions, answered
What is the tax rate on 1099 income in 2026?
There is no single rate. Contractors pay 15.3% self-employment tax on 92.35% of their profit, plus federal income tax at the 2026 brackets after deductions, plus any state income tax. For a single filer with no other income that totals roughly 19% of profit at $40,000, 20% at $60,000 and 22% at $100,000 before state tax.
Is 1099 income taxed more than W-2 income?
The income tax is the same. The difference is that a contractor also pays the employer’s half of Social Security and Medicare: about 14.1% of profit in self-employment tax, against 7.65% withheld from an employee’s pay. And nobody withholds anything during the year.
Do I pay tax on the full amount on my 1099?
No. Tax is figured on profit: what you were paid minus your business expenses on Schedule C. The 1099 shows the gross amount.
How much should I set aside from each 1099 payment?
Enough to cover self-employment tax, income tax at your bracket and any state tax; for many people that is 20% to 30% of what they are paid. The free 1099 tax calculator works out a percentage for your own income and state.
Sources
- Self-employment tax (Social Security and Medicare taxes) — IRS. The 15.3% rate, the 92.35% rule, the $400 threshold and the deductible half.
- Rev. Proc. 2025-32 (PDF) — IRS. The 2026 brackets and standard deductions.
- Contribution and benefit base — Social Security Administration. The $184,500 wage base for 2026.
- Form 1040-ES, Estimated Tax for Individuals — IRS. Who pays quarterly, the $1,000 threshold and the 2026 due dates.
