What Is Self-Employment Tax in the U.S.? A Guide for Freelancers and 1099 Workers
What Is Self-Employment Tax in the U.S.? A Guide for Freelancers and 1099 Workers If you're self-employed or earn income as an independent contractor, you’re not just responsible for income tax — you also owe self-employment (SE) tax. Here's what it is, how it works, and how to stay on top of it. 💼 What Is Self-Employment Tax? Self-employment tax covers: Social Security (12.4%) Medicare (2.9%) Total: 15.3% of your net earnings Employees split this with their employer — but as a freelancer or 1099 worker, you pay the full amount yourself . 📄 Who Pays SE Tax? You must file if: You earned $400 or more in net self-employment income You’re a sole proprietor, freelancer, independent contractor, or gig worker You received income reported on Form 1099-NEC or 1099-K 💡 How to Calculate It Calculate net earnings from self-employment (gross income – expenses) Multiply by 92.35% (the IRS-approved portion) Apply the 15.3% SE tax rate ...