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.
- All data is sourced from verified government databases and updated for 2026.
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 | $138 | $67,917 | SE Tax Calculator |
| 3 | Nevada | 0.00% | $75 | $200 | $66,274 | SE Tax Calculator |
| 4 | New Hampshire | 0.00% | $100 | $100 | $83,449 | SE Tax Calculator |
| 5 | South Dakota | 0.00% | $150 | $50 | $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% | $180 | $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 | 3.05% | $95 | $32 | $61,944 | SE Tax Calculator |
| 13 | Pennsylvania | 3.07% | $125 | $0 | $67,587 | SE Tax Calculator |
| 14 | Ohio | 3.50% | $99 | $0 | $58,642 | SE Tax Calculator |
| 15 | Iowa | 3.80% | $50 | $60 | $65,573 | SE Tax Calculator |
| 16 | Kentucky | 4.00% | $40 | $15 | $55,573 | SE Tax Calculator |
| 17 | Louisiana | 4.25% | $100 | $35 | $52,295 | SE Tax Calculator |
| 18 | Michigan | 4.25% | $50 | $25 | $63,202 | SE Tax Calculator |
| 19 | Arkansas | 4.40% | $45 | $150 | $52,528 | SE Tax Calculator |
| 20 | Colorado | 4.40% | $50 | $10 | $82,254 | SE Tax Calculator |
| 21 | North Carolina | 4.50% | $125 | $200 | $60,516 | SE Tax Calculator |
| 22 | Utah | 4.65% | $54 | $18 | $79,449 | SE Tax Calculator |
| 23 | Oklahoma | 4.75% | $100 | $25 | $55,826 | SE Tax Calculator |
| 24 | Missouri | 4.80% | $50 | $0 | $60,905 | SE Tax Calculator |
| 25 | Illinois | 4.95% | $150 | $75 | $72,205 | SE Tax Calculator |
| 26 | Alabama | 5.00% | $200 | $0 | $56,929 | SE Tax Calculator |
| 27 | Mississippi | 5.00% | $50 | $0 | $48,610 | SE Tax Calculator |
| 28 | West Virginia | 5.12% | $100 | $25 | $48,850 | SE Tax Calculator |
| 29 | Georgia | 5.49% | $100 | $50 | $65,030 | SE Tax Calculator |
| 30 | Kansas | 5.70% | $160 | $55 | $64,521 | SE Tax Calculator |
| 31 | Maryland | 5.75% | $100 | $300 | $90,203 | SE Tax Calculator |
| 32 | Virginia | 5.75% | $100 | $50 | $80,615 | SE Tax Calculator |
| 33 | Idaho | 5.80% | $100 | $0 | $63,377 | SE Tax Calculator |
| 34 | Nebraska | 5.84% | $100 | $13 | $66,644 | SE Tax Calculator |
| 35 | Montana | 5.90% | $70 | $20 | $60,560 | SE Tax Calculator |
| 36 | New Mexico | 5.90% | $50 | $0 | $54,020 | SE Tax Calculator |
| 37 | Rhode Island | 5.99% | $150 | $50 | $71,169 | SE Tax Calculator |
| 38 | South Carolina | 6.40% | $110 | $0 | $56,227 | SE Tax Calculator |
| 39 | Delaware | 6.60% | $90 | $300 | $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% | $125 | $35 | $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 | $25 | $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.
Frequently 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 $168,600 in 2025) and 2.9% Medicare (no cap). This is identical in all states. State income tax on top ranges from 0% to 13.3%.