Question: What is the Self-Employment Tax Rate?
If you are self-employed, you must pay SECA tax (Social Security and Medicare tax) on your income from self-employment. This income is calculated on Schedule C
; Schedule C income or loss is then used to calculate self-employment tax on Schedule SE
The Social Security tax rate for 2013 is 15.3 percent on self-employment income. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance). The Social Security portion is taxed up to the Social Security maximum for each year
. If your net earnings exceed the maximum, you continue to pay only the Medicare portion of the self-employment tax. The Social Security annual maximum applies to all income, including self-employment income and wages or salaries earned from employment.
Self-Employment Tax on 2011 Income
The 2010 Tax Relief Act reduced the self-employment tax by 2% for self-employment income earned in calendar year 2011. The self-employment tax rate for self-employment income earned in calendar year 2011 is 13.3% (10.4% for Social Security and 2.9% for Medicare). For self-employment income earned in 2010, the self-employment tax rate is 15.3%.
More information about self-employment taxes, including how they are calculated and how self-employment taxes affect your total income.