Self-Employment tax

People who work for themselves are required to pay both the employee’s and employer’s share of Social Security and Medicare taxes, which together comprise the self-employment tax. This tax is equivalent to the Federal Insurance Contributions Act (FICA) tax withheld by employers from their earnings. Currently, Social Security tax is 7.65% for both the employee and employer (15.3% total), and Medicare withholding is 1.45%, or 2.9% total between employee and employer.