Self-Employment Tax Explained

Why freelancers often owe more than expected even before income tax.

Self-employment tax covers Social Security and Medicare taxes that are normally split between employee and employer. Independent contractors pay both sides through Schedule SE.

The common headline rate is 15.3% on 92.35% of net self-employment earnings, with additional Medicare tax at higher income levels.

That tax is separate from federal income tax and state tax, which is why a simple income-tax-only estimate can come up short.