Self-employment taxes

If you earn $400 or more from self-employment or gig work, you generally owe self-employment tax: 15.3% for Social Security and Medicare. Nobody withholds it for you, so set money aside from every payment.

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You'll need

Records of what you earned and spent for the work

What to know

Know the trigger: you generally must file and pay self-employment tax if your net earnings from self-employment were $400 or more (IRS).
Know the rate: 15.3%, made up of 12.4% for Social Security and 2.9% for Medicare (IRS).
Set aside a share of every payment in a separate savings account, so tax time isn't a surprise.
Pay during the year. If you expect to owe $1,000 or more when you file, you generally need to make estimated tax payments (IRS).
Track expenses for the work. You report business income and expenses on Schedule C and figure the tax on Schedule SE (IRS).

Watch out. Self-employment tax is on top of regular income tax. Setting aside only enough for one of them is a common surprise.

Good to know

A deduction that helps

You can deduct the employer-equivalent portion of your self-employment tax when figuring your adjusted gross income (IRS).

Pay more often if it's easier

You can pay estimated taxes weekly, every two weeks or monthly, as long as enough is paid by the end of each quarter (IRS).

Why it's 15.3%

An employee splits Social Security and Medicare with the employer: 6.2% plus 1.45% each (IRS). Self-employed, you pay both halves.

Sources

Internal Revenue Service Self-employment tax (Social Security and Medicare taxes)
Internal Revenue Service Estimated taxes
Internal Revenue Service Topic no. 751, Social Security and Medicare withholding rates

Lesson W7.2 · Last checked October 2, 2026 against the sources listed. See a mistake?