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 | $95,665 | SE Tax Calculator |
| 2 | Florida | 0.00% | $125 | $139 | $77,735 | SE Tax Calculator |
| 3 | Nevada | 0.00% | $425 | $350 | $81,134 | SE Tax Calculator |
| 4 | New Hampshire | 0.00% | $100 | $100 | $99,782 | SE Tax Calculator |
| 5 | South Dakota | 0.00% | $150 | $55 | $76,881 | SE Tax Calculator |
| 6 | Tennessee | 0.00% | $300 | $300 | $71,997 | SE Tax Calculator |
| 7 | Texas | 0.00% | $300 | $0 | $79,721 | SE Tax Calculator |
| 8 | Washington | 0.00% | $200 | $60 | $99,389 | SE Tax Calculator |
| 9 | Wyoming | 0.00% | $100 | $60 | $75,532 | SE Tax Calculator |
| 10 | Arizona | 2.50% | $50 | $0 | $81,486 | SE Tax Calculator |
| 11 | North Dakota | 2.50% | $135 | $50 | $77,871 | SE Tax Calculator |
| 12 | Ohio | 2.75% | $99 | $0 | $72,212 | SE Tax Calculator |
| 13 | Indiana | 2.95% | $95 | $31 | $71,959 | SE Tax Calculator |
| 14 | Louisiana | 3.00% | $125 | $35 | $60,986 | SE Tax Calculator |
| 15 | Pennsylvania | 3.07% | $125 | $7 | $77,545 | SE Tax Calculator |
| 16 | Kentucky | 3.50% | $40 | $15 | $64,526 | SE Tax Calculator |
| 17 | Iowa | 3.80% | $50 | $30 | $75,501 | SE Tax Calculator |
| 18 | Arkansas | 3.90% | $45 | $150 | $62,106 | SE Tax Calculator |
| 19 | North Carolina | 3.99% | $125 | $200 | $73,958 | SE Tax Calculator |
| 20 | Mississippi | 4.00% | $50 | $0 | $59,127 | SE Tax Calculator |
| 21 | Michigan | 4.25% | $50 | $25 | $72,389 | SE Tax Calculator |
| 22 | Colorado | 4.40% | $50 | $25 | $97,113 | SE Tax Calculator |
| 23 | Oklahoma | 4.50% | $100 | $25 | $66,148 | SE Tax Calculator |
| 24 | Utah | 4.50% | $59 | $18 | $96,658 | SE Tax Calculator |
| 25 | Nebraska | 4.55% | $100 | $13 | $76,376 | SE Tax Calculator |
| 26 | West Virginia | 4.58% | $100 | $25 | $60,798 | SE Tax Calculator |
| 27 | Missouri | 4.70% | $50 | $0 | $71,589 | SE Tax Calculator |
| 28 | Illinois | 4.95% | $150 | $75 | $83,211 | SE Tax Calculator |
| 29 | Georgia | 4.99% | $110 | $60 | $79,991 | SE Tax Calculator |
| 30 | Alabama | 5.00% | $200 | $50 | $66,659 | SE Tax Calculator |
| 31 | South Carolina | 5.21% | $110 | $0 | $72,350 | SE Tax Calculator |
| 32 | Idaho | 5.30% | $100 | $0 | $81,166 | SE Tax Calculator |
| 33 | Kansas | 5.58% | $160 | $50 | $75,514 | SE Tax Calculator |
| 34 | Montana | 5.65% | $35 | $20 | $75,340 | SE Tax Calculator |
| 35 | Virginia | 5.75% | $100 | $50 | $92,090 | SE Tax Calculator |
| 36 | New Mexico | 5.90% | $50 | $0 | $67,816 | SE Tax Calculator |
| 37 | Rhode Island | 5.99% | $150 | $50 | $83,504 | SE Tax Calculator |
| 38 | Maryland | 6.50% | $100 | $300 | $102,905 | SE Tax Calculator |
| 39 | Delaware | 6.60% | $110 | $400 | $87,534 | SE Tax Calculator |
| 40 | Connecticut | 6.99% | $120 | $80 | $96,049 | SE Tax Calculator |
| 41 | Maine | 7.15% | $175 | $85 | $76,442 | SE Tax Calculator |
| 42 | Wisconsin | 7.65% | $130 | $25 | $77,488 | SE Tax Calculator |
| 43 | Vermont | 8.75% | $155 | $45 | $82,730 | SE Tax Calculator |
| 44 | Massachusetts | 9.00% | $500 | $500 | $104,828 | SE Tax Calculator |
| 45 | Minnesota | 9.85% | $155 | $0 | $87,117 | SE Tax Calculator |
| 46 | Oregon | 9.90% | $100 | $100 | $85,220 | SE Tax Calculator |
| 47 | New Jersey | 10.75% | $125 | $75 | $104,294 | SE Tax Calculator |
| 48 | New York | 10.90% | $200 | $9 | $85,820 | SE Tax Calculator |
| 49 | Hawaii | 11.00% | $50 | $15 | $100,745 | SE Tax Calculator |
| 50 | California | 13.30% | $70 | $800 | $100,149 | 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%.