The Guide to Self-Employment Tax (SE Tax) in 2025
Being your own boss is great, but the tax bill can be a surprise. When you are employed, your employer pays half of your Social Security and Medicare taxes. When you are self-employed, you must pay both halves.
This is known as the Self-Employment Tax, and it totals roughly 15.3% of your net earnings.
Breakdown of the 15.3% Rate
- 12.4% for Social Security: Applies to the first ,100 of earnings (in 2025).
- 2.9% for Medicare: Applies to all earnings.
The good news is that you can deduct the "employer-equivalent" portion (half of this tax) from your adjustable gross income, reducing your income tax liability.
Quarterly Estimated Payments
Unlike W-2 employees, taxes aren't withheld from your client checks. The IRS expects you to pay estimated taxes four times a year (April, June, September, January) to avoid penalties.