What is the Self-Employment Tax Rate?
By Jean Murray. US Business Law / Taxes Expert
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Question: What is the Self-Employment Tax Rate?
Answer: The Social Security tax rate currently is 15.3 percent on self-employment income. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance).
The Social Security portion is taxed up to the Social Security maximum for each year. If your net earnings exceed the maximum, you continue to pay only the Medicare portion of the self-employment tax. The Social Security annual maximum applies to all income, including self-employment income and wages or salaries earned from employment.Source: biztaxlaw.about.com