What is the self-employment tax rate for 2025?

The 2025 self-employment tax rate is 15.3% — made up of 12.4% for Social Security and 2.9% for Medicare. It applies to 92.35% of your net self-employment profit.

Why do self-employed people pay 15.3%?

Employees split Social Security and Medicare taxes 50/50 with their employer. When you're self-employed you are both the employer and the employee, so you pay both halves — 15.3% total.

Is all my income taxed at 15.3%?

No. Self-employment tax applies to 92.35% of your net profit (gross income minus business expenses), not your gross revenue. The Social Security portion (12.4%) only applies up to the annual wage base ($176,100 in 2025); the 2.9% Medicare portion has no cap.

How can I lower my self-employment tax?

Deduct every legitimate business expense to reduce net profit, deduct half of your SE tax on your income tax return, and — at higher income — consider an S-corporation election, which can reduce the portion of income subject to SE tax. Consult a tax professional.

Self-Employment Tax Rate 2025: How the 15.3% Works

The 2025 self-employment tax rate is 15.3%. It breaks down into 12.4% for Social Security and 2.9% for Medicare, and it applies to 92.35% of your net self-employment profit — not your gross revenue. The Social Security portion applies only up to $176,100 of earnings (2025); the Medicare portion has no cap. You also pay federal (and often state) income tax on top of this.

How the 15.3% is calculated

Self-employment tax is calculated in a few steps: (1) subtract business expenses from gross income to get net profit; (2) multiply net profit by 92.35% to get the taxable base; (3) apply 12.4% Social Security (up to the $176,100 wage base) and 2.9% Medicare (no cap). You can then deduct half of the SE tax when figuring your income tax.

Who has to pay self-employment tax?

Anyone with $400 or more in net self-employment earnings — freelancers, gig workers, independent contractors, sole proprietors, and single-member LLC owners. It is separate from, and in addition to, federal income tax.

Self-employment tax vs. income tax

These are two different taxes. Self-employment tax (15.3%) funds Social Security and Medicare. Federal income tax is charged on your taxable income at graduated rates (10%–37% in 2025). Most self-employed people owe both, which is why a common rule of thumb is to set aside 25–30% of net income for taxes.

Estimate your exact tax by profession

Different jobs have very different deductions. Use a profession-specific calculator for a closer estimate: rideshare drivers, freelance writers, photographers, real estate agents, or browse all 50 professions.

Frequently asked questions

What is the self-employment tax rate for 2025?: The 2025 self-employment tax rate is 15.3% — made up of 12.4% for Social Security and 2.9% for Medicare. It applies to 92.35% of your net self-employment profit.
Why do self-employed people pay 15.3%?: Employees split Social Security and Medicare taxes 50/50 with their employer. When you're self-employed you are both the employer and the employee, so you pay both halves — 15.3% total.
Is all my income taxed at 15.3%?: No. Self-employment tax applies to 92.35% of your net profit (gross income minus business expenses), not your gross revenue. The Social Security portion (12.4%) only applies up to the annual wage base ($176,100 in 2025); the 2.9% Medicare portion has no cap.
How can I lower my self-employment tax?: Deduct every legitimate business expense to reduce net profit, deduct half of your SE tax on your income tax return, and — at higher income — consider an S-corporation election, which can reduce the portion of income subject to SE tax. Consult a tax professional.

Estimates and general information only, not tax advice. Based on 2025 US federal rules. Consult a tax professional for your situation.