Lowest Tax States for Self-Employed Workers (2026)
Self-employed individuals pay 15.3% self-employment tax (Social Security + Medicare) regardless of state. But state income tax adds 0-13.3% on top. This guide ranks states by total tax burden for freelancers, contractors, and business owners.
- Alaska ranks #1 with the lowest top tax rate at 0.00%.
- California ranks last at 13.30% — the highest among all states.
- The top 5 states are Alaska, Florida, Nevada, New Hampshire, South Dakota.
- The ranking basis, source limitations, and calculation method are documented in the Methodology section below.
Top 3 States
All 50 States Ranked
Lowest to highest by top tax rate
| # | State | Top Tax Rate | LLC Filing Fee | LLC Annual Fee | Median Income | Calculator |
|---|---|---|---|---|---|---|
| 1 | Alaska | 0.00% | $250 | $100 | $77,790 | SE Tax Calculator |
| 2 | Florida | 0.00% | $125 | $139 | $67,917 | SE Tax Calculator |
| 3 | Nevada | 0.00% | $425 | $350 | $66,274 | SE Tax Calculator |
| 4 | New Hampshire | 0.00% | $100 | $100 | $83,449 | SE Tax Calculator |
| 5 | South Dakota | 0.00% | $150 | $55 | $63,920 | SE Tax Calculator |
| 6 | Tennessee | 0.00% | $300 | $300 | $56,071 | SE Tax Calculator |
| 7 | Texas | 0.00% | $300 | $0 | $67,321 | SE Tax Calculator |
| 8 | Washington | 0.00% | $200 | $60 | $82,228 | SE Tax Calculator |
| 9 | Wyoming | 0.00% | $100 | $60 | $65,003 | SE Tax Calculator |
| 10 | North Dakota | 1.95% | $135 | $50 | $68,131 | SE Tax Calculator |
| 11 | Arizona | 2.50% | $50 | $0 | $72,581 | SE Tax Calculator |
| 12 | Indiana | 2.95% | $95 | $31 | $61,944 | SE Tax Calculator |
| 13 | Louisiana | 3.00% | $125 | $35 | $52,295 | SE Tax Calculator |
| 14 | Pennsylvania | 3.07% | $125 | $7 | $67,587 | SE Tax Calculator |
| 15 | Kentucky | 3.50% | $40 | $15 | $55,573 | SE Tax Calculator |
| 16 | Ohio | 3.50% | $99 | $0 | $58,642 | SE Tax Calculator |
| 17 | Arkansas | 3.70% | $45 | $150 | $52,528 | SE Tax Calculator |
| 18 | Iowa | 3.80% | $50 | $30 | $65,573 | SE Tax Calculator |
| 19 | North Carolina | 3.99% | $125 | $200 | $60,516 | SE Tax Calculator |
| 20 | Mississippi | 4.00% | $50 | $0 | $48,610 | SE Tax Calculator |
| 21 | Michigan | 4.25% | $50 | $25 | $63,202 | SE Tax Calculator |
| 22 | Colorado | 4.40% | $50 | $25 | $82,254 | SE Tax Calculator |
| 23 | Oklahoma | 4.50% | $100 | $25 | $55,826 | SE Tax Calculator |
| 24 | Nebraska | 4.55% | $100 | $13 | $66,644 | SE Tax Calculator |
| 25 | West Virginia | 4.58% | $100 | $25 | $48,850 | SE Tax Calculator |
| 26 | Utah | 4.65% | $59 | $18 | $79,449 | SE Tax Calculator |
| 27 | Missouri | 4.70% | $50 | $0 | $60,905 | SE Tax Calculator |
| 28 | Illinois | 4.95% | $150 | $75 | $72,205 | SE Tax Calculator |
| 29 | Alabama | 5.00% | $200 | $50 | $56,929 | SE Tax Calculator |
| 30 | Georgia | 5.19% | $110 | $60 | $65,030 | SE Tax Calculator |
| 31 | South Carolina | 5.21% | $110 | $0 | $56,227 | SE Tax Calculator |
| 32 | Montana | 5.65% | $35 | $20 | $60,560 | SE Tax Calculator |
| 33 | Kansas | 5.70% | $160 | $50 | $64,521 | SE Tax Calculator |
| 34 | Maryland | 5.75% | $100 | $300 | $90,203 | SE Tax Calculator |
| 35 | Virginia | 5.75% | $100 | $50 | $80,615 | SE Tax Calculator |
| 36 | Idaho | 5.80% | $100 | $0 | $63,377 | SE Tax Calculator |
| 37 | New Mexico | 5.90% | $50 | $0 | $54,020 | SE Tax Calculator |
| 38 | Rhode Island | 5.99% | $150 | $50 | $71,169 | SE Tax Calculator |
| 39 | Delaware | 6.60% | $110 | $400 | $72,724 | SE Tax Calculator |
| 40 | Connecticut | 6.99% | $120 | $80 | $83,771 | SE Tax Calculator |
| 41 | Maine | 7.15% | $175 | $85 | $64,767 | SE Tax Calculator |
| 42 | Wisconsin | 7.65% | $130 | $25 | $67,125 | SE Tax Calculator |
| 43 | Vermont | 8.75% | $155 | $45 | $65,792 | SE Tax Calculator |
| 44 | Massachusetts | 9.00% | $500 | $500 | $89,645 | SE Tax Calculator |
| 45 | Minnesota | 9.85% | $155 | $0 | $77,706 | SE Tax Calculator |
| 46 | Oregon | 9.90% | $100 | $100 | $70,084 | SE Tax Calculator |
| 47 | New Jersey | 10.75% | $125 | $75 | $89,296 | SE Tax Calculator |
| 48 | New York | 10.90% | $200 | $9 | $74,314 | SE Tax Calculator |
| 49 | Hawaii | 11.00% | $50 | $15 | $84,857 | SE Tax Calculator |
| 50 | California | 13.30% | $70 | $800 | $91,905 | SE Tax Calculator |
Methodology
How we collected and ranked the data
States are ranked by top marginal income tax rate (ascending), since self-employment tax (15.3%) is federal and identical across states. The key state-level variable is income tax rate. LLC filing and annual fees also factor into total cost of doing business. Data from Tax Foundation and IRS.
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View all 107 state comparisonsFrequently Asked Questions
Which states are best for self-employed taxes?
The 9 states with no income tax (AK, FL, NV, NH, SD, TN, TX, WA, WY) save self-employed workers thousands in state taxes annually. Among taxable states, North Dakota, Pennsylvania, and Indiana have the lowest flat rates.
How much self-employment tax do I owe?
SE tax is 15.3% on 92.35% of net self-employment earnings: 12.4% Social Security (up to $184,500 in 2026) and 2.9% Medicare (no cap). This is identical in all states. State income tax on top ranges from 0% to 13.3%.