How is SE tax calculated?
A self-employed person must pay both the employer and employee share of tax that goes to Social Security and Medicare. The self-employment tax rate is currently 15.30% of your net income. Remember that half of that tax you owe is allowed as a deduction against your income. Therefore, about 92.35% of your income (if under $102,000) gets taxed at the 15.30% rate…the actual rate over your whole income is therefore about 14.13%. See this link for a Self-Employment Tax Calculator.
