2026 tax year · US · Updated June 11, 2026

Etsy Tax Calculator (2026)

Your Etsy sales total is the biggest number you will see all year, and the least meaningful. Between Etsy’s fees, your materials, and self-employment tax, the profit you keep is a different figure entirely. Enter your gross sales and costs to find it.

Your numbers

Runs entirely in your browser — your numbers are never sent to a server.

$
Gross sales on Etsy (before fees).

Etsy fees are approximate: 6.5% transaction fee + 3% payment processing + ~$0.20 listing fees.

$
Optional. Things you bought specifically for this work.
Tax situation (advanced)
$
Used to estimate your marginal income tax bracket. Default $0 if gig work is your only income.
Heads up: Select your state above to include state income tax. Otherwise this is a federal-only estimate.

Your real 2026 take-home

Gross Etsy earnings
$30,000
Etsy platform fee10.0% of gross
−$3,000
Net self-employment incomeWhat lands on your Schedule C
$27,000
Self-employment tax15.3% × 92.35% (Social Security + Medicare)
−$3,815
Estimated federal income taxIncremental tax from this SE income
−$899
True take-home
$22,286
True hourly rate1,250 hours/year
$17.83/hr
Effective take-home rateTrue take-home ÷ gross earnings
74%
Quarterly estimated paymentSE tax + federal income tax, divided by 4
$1,179

From sales total to taxable profit

Unlike a delivery driver whose main deduction is a car, an Etsy seller’s taxable profit is whittled down in layers. First come Etsy’s fees: this calculator approximates them using Etsy’s published structure of a 6.5% transaction fee plus 3% payment processing plus roughly $0.20 per listing. Then come your materials: yarn, clay, fabric, and findings that went into items you sold are cost of goods sold, deducted through Part III of Schedule C (or as supplies, depending on your accounting method). Packaging, shipping supplies, and tools come off as well. Only what survives all of that is taxed, at 15.3% self-employment tax on 92.35% of net profit, plus income tax.

Sales tax is mostly not your problem

One genuine relief: under state marketplace facilitator laws, Etsy collects and remits sales tax on marketplace orders in states with a sales tax. You do not file those returns for Etsy sales, though orders sold off-platform (your own site, craft fairs) remain your responsibility. Income tax is a different story, and it starts with a question many makers skip: is the shop a business or a hobby? A hobby pays tax on gross income with no deductions; a business deducts everything above but owes self-employment tax. Our hobby vs business guide walks through how the IRS draws that line. For the full filing picture, read the Etsy seller tax guide, and once you know your profit, the quarterly estimated tax calculator converts it into four scheduled payments.

These are estimates, not tax advice. Fee figures are approximate; your Etsy payment account shows the exact amounts. State income tax is included when you select a state (2026 single-filer brackets, excluding state standard deductions and local taxes).

Where these numbers come from

Profit is computed as gross sales minus approximate Etsy fees and your costs, then minus self-employment tax, federal income tax, and state income tax where selected. The rates come from these primary sources:

Constants last verified against these sources on June 11, 2026. Every value is also pinned by an automated test suite that fails if a rate in the calculator drifts from the figure we transcribed from the source.

Frequently asked questions

Will Etsy send me a 1099-K?
Etsy issues Form 1099-K under the federal third-party settlement rules: more than $20,000 in payments AND more than 200 transactions in the calendar year. Some states require the form at lower thresholds, so smaller shops may still receive one. Your sales are taxable income either way; the form only changes what gets reported to the IRS, not what you owe.
How does this calculator handle Etsy's fees?
You enter gross sales, and the calculator applies an approximate combined fee based on Etsy's published structure: a 6.5% transaction fee plus 3% payment processing plus roughly $0.20 listing fees. Your actual fee total appears in your Etsy payment account; at filing time use the real number from Etsy's records rather than an estimate.
Can I deduct my materials and supplies?
Yes. Materials that go into items you sold are cost of goods sold, handled in Part III of Schedule C if you track inventory, or deducted as supplies depending on your accounting method. Packaging, shipping labels, tools, and the business share of software subscriptions are deductible too. Etsy fees themselves are also a business expense.
Do I have to collect sales tax on Etsy orders?
Generally not for orders sold through Etsy. Under state marketplace facilitator laws, Etsy calculates, collects, and remits sales tax on marketplace orders in states that have sales tax. If you also sell off-platform (your own website, craft fairs), those sales can still create sales tax obligations that are yours to handle.
Is my Etsy shop a business or a hobby for tax purposes?
The IRS looks at factors like whether you run the shop in a businesslike way, keep records, put in regular effort, and intend to make a profit. The difference matters: hobby income is taxed with no deductions allowed against it, while a business deducts fees and materials but pays self-employment tax on the profit. An activity profitable in 3 of the last 5 years is generally presumed to be a business.
Do Etsy sellers owe quarterly estimated taxes?
If you expect to owe $1,000 or more in federal tax for the year after any withholding, yes: payments are due April 15, June 15, and September 15, 2026, then January 15, 2027. Self-employment tax (15.3% on 92.35% of net profit) applies once net earnings from the shop reach $400, even if Etsy is a side project next to a day job.

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