Self-Employment Tax
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A US tax that self-employed individuals pay to cover Social Security and Medicare contributions, equivalent to both the employee and employer shares of FICA at a combined rate of 15.3%.
## Self-Employment Tax
Self-employment (SE) tax is the FICA equivalent for people who work for themselves. Since there is no employer to pay half, self-employed individuals pay the full amount.
### Rates (2025)
| Component | Rate | Wage Base |
|-----------|------|-----------|
| Social Security | 12.4% | $176,100 |
| Medicare | 2.9% | No limit |
| Additional Medicare | 0.9% | Above $200K |
| **Total** | **15.3%** (up to SS limit) | — |
### Deduction
Self-employed individuals can deduct the employer-equivalent portion (7.65%) from their adjusted gross income, slightly reducing the effective burden.
### Who Pays
Freelancers, gig workers, sole proprietors, and partners in partnerships all owe SE tax. LLC members and S-corp shareholders who receive reasonable compensation must also pay. Income below $400 is exempt.
### Quarterly Payments
SE tax must be paid quarterly via estimated payments (Form 1040-ES). Underpayment triggers a penalty.