Finance Maxxing
FICA & Payroll Taxes
Self-Employment Tax
FICA equivalent for self-employed individuals (15.3%).
Self-employed individuals pay both the employee and employer portions of FICA.
Calculation
Net self-employment income × 92.35% = SE tax base
SE tax base × 12.4% = Social Security (up to wage base)
SE tax base × 2.9% = Medicare (no limit)
SE tax base × 0.9% = Additional Medicare (above threshold)
The 92.35% factor approximates the employer's share. Half of SE tax is deductible as an above-the-line deduction.
Example: $150,000 Net SE Income
| Component | Amount |
|---|---|
| SE tax base | $138,525 |
| Social Security (12.4%) | $17,177 |
| Medicare (2.9%) | $4,017 |
| Total SE tax | $21,194 |
| Above-the-line deduction | $10,597 |