Self-Employment Tax for Locum Tenens 1099 Clinicians

Locum tenens 1099 clinicians pay self-employment (SE) tax at a 15.3% rate — 12.4% for Social Security plus 2.9% for Medicare — assessed on 92.35% of net self-employment profit, not on raw profit. The 12.4% Social Security portion applies only up to the annual Social Security wage base, which is $184,500 for 2026; the 2.9% Medicare portion is uncapped and applies to every dollar of the SE base. One-half of the SE tax is then deductible above the line on your income tax return.

The 92.35% multiplier is mandatory, not optional. SE tax is computed on net profit times 0.9235 — never on the full net profit figure. This adjustment mirrors the employer-side payroll deduction a W-2 employer takes implicitly, so the SE-tax base and a W-2 worker's taxed wages line up fairly. Skipping the multiplier overstates the tax.

You owe SE tax once your net earnings from self-employment reach $400 for the year. Because no employer withholds it for you, SE tax is paid through quarterly estimated-tax payments — but it is a distinct liability from income tax, and it is reported on Schedule SE (Form 1040).

On $300,000 of net self-employment profit, a single-filer locum owes about $30,912 in self-employment tax, plus roughly $693 of Additional Medicare Tax — about $31,606 total. Here is how it breaks down.

First, the SE base is $300,000 × 92.35% = $277,050. Because $277,050 exceeds the $184,500 (2026) Social Security wage base, the 12.4% Social Security portion is capped at $184,500 × 12.4% = $22,878. The 2.9% Medicare portion is uncapped, so it applies to the full $277,050: $277,050 × 2.9% = $8,034.45. Total SE tax = $22,878 + $8,034.45 = $30,912.45.

You then deduct one-half of that SE tax — $15,456.23 — above the line. Read that line carefully: as the IRS puts it, the deduction "only affects your income tax. It does not affect either your net earnings from self-employment or your self-employment tax." It lowers your AGI and therefore your income tax; it does not cut the $30,912 SE liability in half.

The Additional Medicare Tax is filing-status dependent, which is why the total changes with your return. A single filer pays 0.9% on the SE base above $200,000: ($277,050 − $200,000) × 0.9% = $693.45. A married-filing-jointly clinician whose household income is just this $300,000 sits below the $250,000 MFJ threshold and owes $0 Additional Medicare Tax — so the MFJ total is $30,912.45. The Additional Medicare Tax is computed on the 92.35% SE base (not raw profit), combines W-2 Medicare wages with SE income, and is reported on Form 8959.

Because a 1099 locum is their own employer and pays both halves of the payroll tax. A W-2 employee pays 7.65% FICA (6.2% Social Security up to the wage base + 1.45% Medicare), and the employer separately pays a matching 7.65%. When you work locum as an independent contractor, no one matches you — so you pay the full 15.3% yourself as self-employment tax.

On the same $300,000 the difference is concrete. A W-2 employee's FICA is 6.2% × $184,500 (capped) = $11,439 in Social Security plus 1.45% × $300,000 = $4,350 in Medicare — $15,789 total. The 1099 locum's SE tax is $30,912.45. The roughly $15,000 gap is the employer half you now shoulder.

Two things soften that gap and belong in any apples-to-apples comparison. First, you deduct half of your SE tax above the line (about $15,456 on $300k), which a W-2 employee never gets. Second, as a self-employed clinician you can deduct legitimate business expenses — licensing, malpractice, CME, travel, a home office, retirement-plan contributions — that a W-2 employee largely cannot. The headline 15.3% is real, but the net cost after the deduction and business write-offs is meaningfully lower. For the trade-offs beyond tax, see the 1099-vs-W2 guide.

Yes — but only on part of it. The 12.4% Social Security portion is capped at the annual wage base, which is $184,500 for 2026, so the most Social Security SE tax any clinician can owe in 2026 is $22,878. The 2.9% Medicare portion has no cap and continues on every dollar of your SE base. A common and costly error is applying the full 15.3% to all income; above the wage base, only 2.9% (plus possibly the 0.9% Additional Medicare Tax) applies.

Use the correct 2026 wage base. Do not use the stale $176,100 (2025) or $168,600 (2024) figures. Note that the IRS general self-employment-tax landing page still displays the 2024 $168,600 amount in its own example, which is why the wage base should be cited to the SSA, not that IRS page.

The Additional Medicare Tax adds 0.9% on the portion of your SE base (combined with any Medicare wages) above $200,000 for single/head-of-household filers, $250,000 for married filing jointly, and $125,000 for married filing separately. These thresholds are fixed in statute and are not indexed for inflation. For SE income, the threshold is first reduced by any W-2 Medicare wages. It is computed on the 92.35% SE base and reported on Form 8959. Because the thresholds differ by filing status, the same $300,000 can produce $693 of Additional Medicare Tax for a single filer and $0 for a married-filing-jointly household at that income.

The single biggest lever is entity choice — specifically an S-corporation election. As a sole proprietor or single-member LLC, your entire net profit (× 92.35%) is hit by SE tax. With an S-corp, only the W-2 "reasonable salary" you pay yourself is subject to FICA; the remaining profit taken as distributions escapes SE tax entirely. The catch is that the salary must be defensibly reasonable for your specialty and hours, and the structure adds payroll and compliance costs — so it generally pays off only above a certain income. Whether an S-corp (and the PLLC or professional-corporation form it sits on) is even available, and how a state treats the election, varies by state. The math and break-even are covered in the S-corp guide; this guide does not compute it.

A few related points worth keeping straight. Self-employment tax is not the same as income tax or the QBI deduction. Physicians, CRNAs, and AAs are a specified service trade or business (SSTB) in the field of health, so the §199A QBI deduction phases out to $0 above the 2026 thresholds ($276,750 single / $553,500 MFJ per Rev. Proc. 2025-32) — but QBI affects income tax, not SE tax. SE tax is also distinct from quarterly estimated taxes: SE tax is one of the liabilities you pay through estimates, not a synonym for them.

Finally, self-employment tax is federal and is owed regardless of where you practice. Working in a no-income-tax state such as Texas, Florida, Nevada, or Washington spares you state income tax, not SE tax. For deductions that lower the net profit on which SE tax is calculated in the first place, see the tax-deductions guide.