Short version: The Social Security part of self-employment tax stops at $184,500 of earnings in 2026. On a $1,000,000 deal with no other pay, it's $22,878, Medicare adds $33,293, and $943,829 is left before income tax.
Last week we walked a $100,000 deal down the forms. This week the deal is ten times bigger, and one line on the form does something it didn't do before. It stops counting.
That line is the wage base: a ceiling on how much of your earnings the Social Security part of the tax is figured on. It's printed on the form itself. Here's what it reads, and what it changes.
The term, read back
Line 7 of Schedule SE asks for the "maximum amount of combined wages and self-employment earnings subject to social security tax." On the IRS's early release draft of the 2026 form, the number printed there is $184,500.
The IRS says the same thing on its self-employment tax page: for 2026, the first $184,500 of your combined wages, tips and net earnings is subject to the Social Security part. Above that, the 12.4 percent stops.
The Medicare part doesn't stop. It keeps going on every dollar. And past $200,000, a second Medicare tax starts.
The deal, line by line
Say a brand pays you $1,000,000 for work in 2026. No team pay, no other deals, no costs, single filer, and nobody takes a cut. Here's the walk on the 2026 draft Schedule SE and Form 8959.
| Line | What the form does | This deal |
|---|---|---|
| Schedule C, line 31 | Net profit | $1,000,000 |
| Schedule SE, line 4a | Net profit times 92.35% | $923,500 |
| Schedule SE, line 7 | The 2026 ceiling | $184,500 |
| Schedule SE, line 10 | 12.4% of the smaller of $923,500 or $184,500 | $22,878.00 |
| Schedule SE, line 11 | 2.9% of all $923,500, Medicare | $26,781.50 |
| Schedule SE, line 12 | Self-employment tax | $49,659.50 |
| Form 8959, line 12 | $923,500 minus the $200,000 threshold | $723,500 |
| Form 8959, line 13 | 0.9% of that, Additional Medicare Tax | $6,511.50 |
Line 10 is where the ceiling bites. Without it, 12.4 percent of $923,500 would be $114,514. With it, the form takes 12.4 percent of $184,500, which is $22,878.
The two Medicare lines together come to $33,293. Add the $22,878 and the deal owes $56,171 in Social Security and Medicare. $943,829 is left.
The whole walk
| Step | Minus | Left |
|---|---|---|
| The deal | $1,000,000 | |
| Social Security, stops at $184,500 | $22,878 | $977,122 |
| Medicare, 2.9% plus 0.9% over $200,000 | $33,293 | $943,829 |
| Leave | $0 | $943,829 |
Ten times the deal. About four times the tax.
Last week's $100,000 deal, with no cut, owed $14,129.55 in self-employment tax. This one owes $56,171 counting the extra Medicare tax. The deal is ten times bigger and the bill is about four times bigger, because one of the three pieces stopped at line 7.
If you also have team pay
The ceiling counts wages and deal money together, and wages go first. Line 8a of Schedule SE asks for your Social Security wages from your W-2s. If they're $184,500 or more, the form says to skip lines 8b through 10.
So say the same athlete also drew $300,000 in team pay on a W-2. The Social Security line on the deal is $0. The team's payroll already reached the ceiling.
Medicare still runs. Line 11 is the same $26,781.50. And on Form 8959, the $200,000 threshold is first reduced by the wages. $300,000 is more than $200,000, so line 11 of Form 8959 is zero and all $923,500 gets the 0.9 percent: $8,311.50.
That's $35,093 on the deal, and $964,907 of it left before income tax. Same deal, $21,078 less in these two taxes, only because of what else came in that year.
The IRS's own example works the same way. A single filer with $130,000 in wages and $145,000 in self-employment income has the $200,000 threshold cut to $70,000, and pays the 0.9 percent on $75,000.
If the money lands in 2027
The ceiling moves each year. On October 14, 2026, the Social Security Administration announced $192,300 for 2027, the Journal of Accountancy reported. The IRS pages still showed 2026's figure when we checked.
On the same deal paid in 2027, the Social Security line would be 12.4 percent of $192,300, or $23,845.20. The $200,000 Medicare threshold doesn't move. The IRS says those amounts aren't indexed for inflation.
What isn't counted yet
Income tax. It depends on the rest of your year: other pay, costs, where you live, how you file. So we stop at the line before it, the same as last week.
One thing from the forms carries into it. Half of Schedule SE line 12, $24,829.75 here, goes on Schedule 1 as a deduction when adjusted gross income is figured. The 0.9 percent isn't part of that line.
Your own numbers depend on your situation. This is one deal, one filer and no other costs, worked the way the forms work it.
What Leave does with this
Upload the agreement and Leave reads it back in plain words: the amount, when each payment is due, and any fee someone takes. Home keeps the dates, including a payment that lands in January instead of December.
Leave takes 0 percent of anything you sign, on a $1,000 deal or a $1,000,000 one. Every source is linked at the bottom of this post. You decide what to sign.
Questions people ask
Is the $184,500 ceiling per deal or per year?
Per year, for everything together. The IRS counts your combined wages, tips and net earnings from self-employment against it, and the Schedule SE instructions combine every business you have on one Schedule SE.
Does the Medicare part stop at a ceiling too?
No. The 2.9 percent applies to all of your net earnings. Above $200,000 for a single filer, Form 8959 adds another 0.9 percent, and the IRS says those thresholds are not indexed for inflation.
Does Leave take a share of a deal this size?
No. Leave takes 0 percent of any deal. It costs $19.99 a month after 14 days free, or $189.99 a year, whatever the deal is worth.
Be your own agent. Leave.