The 15.3% Social Security and Medicare tax self-employed people pay on net earnings.
Employees split FICA with employers; the self-employed pay both halves (on 92.35% of net profit), then deduct half. It applies from the first $400 of profit — the classic freelancer surprise.
Example: $80,000 net profit owes about $11,304 SE tax (2025).
FAQ
What is Self-Employment Tax in simple terms?
Employees split FICA with employers; the self-employed pay both halves (on 92.35% of net profit), then deduct half. It applies from the first $400 of profit — the classic freelancer surprise.