The Self-Employment Tax

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What is the self-employment tax?

The self-employment tax covers Social Security and Medicare for self-employed individuals. You pay it as part of your standard tax payment at the end of the year (or quarterly, see below).

Do I have to pay it?

If you’re self-employed and your net earnings are over $400 for the year, you have to pay it. 

How much do I have to pay?

In 2018, the rate is 15.3% (12.4% for Social Security, 2.9% for Medicare).

When do I pay it?

If you think you’ll owe more than $1,000 in total taxes at the end of the year, you’ll need to pay quarterly. Otherwise, you can pay at the end of the year. Learn more about quarterly tax payments.


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