What is the U.S. Federal Government Self-Employment Tax Rate?
The self-employment tax rate is currently 15.3 percent (12.4 percent goes to fund Social Security and 2.9 percent is applied to Medicare).
If your net earnings exceed these amounts (i.e., more than $102,000 in 2008 or $106,800 for 2009), you continue to pay taxes – but only the Medicare portion of the Social Security tax.
The Medicare portion of taxable income over these thresholds is calculated at 2.9 percent on the rest of your earnings. The chart below shows self-employment tax rates for 2007, 2008, and 2009 and how they are broken down:
| Self-Employment Tax Rates | ||
| 2007 | 2008 | 2009 |
| 15.3% on self-employment income up to $97,500 | 15.3% on self-employment income up to $102,000 | 15.3% on self-employment income up to $106,800 |
| Plus 2.9% for Medicare tax on earnings over $97,500 | Plus 2.9% for Medicare tax on earnings over $102,500 | Plus 2.9% for Medicare tax on earnings over $106,800 |
Source:
Social Security Administration. "Electronic Fact Sheet." Access Date: 01/21/09.
