Self-employment tax
By Jude Wallis
Self-employment tax is Social Security plus Medicare charged on net earnings from self-employment. The tax base is 92.35 percent of net, and the combined teaching rate on that base is 15.3 percent.
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An employee sees 6.2 percent Social Security plus 1.45 percent Medicare withheld, with a match from the employer. A self-employed filer pays both halves. The 92.35 percent shrink is the employer-equivalent half, applied before the 15.3 percent.
Half of the SE tax is an above-the-line deduction against ordinary income in the usual United States design. It does not cancel the SE tax itself.
How self-employment tax works is the explainer. The self-employment tax calculator applies the identity. How FICA works is the employee picture.