Self-Employment Tax Rates

Self-employment tax is a tax that individuals who work for themselves must pay to cover Social Security and Medicare contributions. As of 2023, the self-employment tax rate is 15.3%. This breaks down into 12.4% for Social Security (up to a certain income limit) and 2.9% for Medicare (with no income limit). If your income exceeds a specific threshold, additional Medicare taxes may apply. Self-employed individuals can deduct half of the self-employment tax when calculating their taxable income, which helps reduce their overall tax burden.