Self-Employment Contributions Act (SECA)

The Self-Employment Contributions Act (SECA) is a U.S. law that requires self-employed individuals to pay Social Security and Medicare taxes, similar to the payroll taxes that employees and employers pay. Since self-employed people don’t have an employer to contribute on their behalf, they must cover both the employee and employer portions of these taxes, totaling 15.3% of their net earnings. SECA helps ensure that self-employed individuals contribute to the social safety net, which provides benefits like retirement income and healthcare coverage through Medicare.