2023 Self-Employment Tax
For 2023, the Self-Employment Tax is 15.3% (Rate), 12.4% (Social security rate), 2.9% (Medicare rate) and 92.35% (Share of net earnings taxed).
Effective 2023-01-01Source: Publication 334 (2023), Tax Guide for Small Business (IRS)Verified 2026-08-29
Compared with 2022
Every figure on this page is unchanged from 2022.
| Item | 2022 | 2023 | Change |
|---|---|---|---|
| Rate | 15.3% | 15.3% | +0% (+0.0%) |
| Social security rate | 12.4% | 12.4% | +0% (+0.0%) |
| Medicare rate | 2.9% | 2.9% | +0% (+0.0%) |
| Share of net earnings taxed | 92.35% | 92.35% | +0% (+0.0%) |
Who it applies to
Self-employed individuals, including independent contractors and sole proprietors
What changed this year, and why
The 2023 self-employment tax rate is 15.3% of net earnings from self-employment. The 15.3% rate is made of two parts: 12.4% for social security and 2.9% for Medicare. Both parts are charged on the same net earnings from self-employment, and only the social security part stops at the year’s wage base.
Common questions
- What is the self-employment tax rate for 2023?
- The self-employment tax rate for 2023 is 15.3%, which covers Social Security and Medicare.
- Who must pay self-employment tax?
- It applies to people who work for themselves, such as independent contractors, freelancers, and sole proprietors.
- What are the two parts of the 2023 self-employment tax rate?
- The self-employment tax rate of 15.3% consists of 12.4% for social security and 2.9% for Medicare. The 12.4% social security part applies only up to the year’s social security wage base, while the 2.9% Medicare part applies to all net earnings from self-employment with no ceiling of its own.
The $400 threshold that makes Schedule SE mandatory
If your net earnings from self-employment reach $400 or more in a year, you must pay self-employment tax and file Schedule SE (Form 1040). Church employee income is handled separately and is not counted toward this $400 threshold. The rule applies regardless of your age and even if you are already drawing Social Security or Medicare benefits. Once you cross the threshold, your net earnings are subject to a combined rate of 15.3%, which breaks down into a 12.4% Social Security portion and a 2.9% Medicare portion. However, only 92.35% of your net earnings actually enters the tax calculation.
Who must pay SE tax. You must pay SE tax and file Schedule SE (Form 1040) if either of the following applies. 1. Your net earnings from self-employment (excluding church employee income) were $400 or more. 2. You had church employee income of $108.28 or more.
Publication 334 (2023), Tax Guide for Small Business (IRS)
Church employee income is taxed from $108.28
If you work as an employee of a church, special rules apply. You must file Schedule SE if your church employee income reaches $108.28 or more in the year. This is a much lower threshold than the $400 floor that applies to regular self-employment earnings. The reason is that churches are not required to withhold Social Security and Medicare taxes from employee wages, so the IRS uses a lower trigger to ensure coverage. Once the threshold is met, the income is subject to the same 15.3% combined rate as other self-employment income - 12.4% for Social Security and 2.9% for Medicare.
Who must pay SE tax. You must pay SE tax and file Schedule SE (Form 1040) if either of the following applies. 1. Your net earnings from self-employment (excluding church employee income) were $400 or more. 2. You had church employee income of $108.28 or more.
Publication 334 (2023), Tax Guide for Small Business (IRS)
Age and drawing benefits do not exempt you
Age and benefit status do not provide an exemption from self-employment tax. The rules apply no matter how old you are and even if you are already receiving Social Security or Medicare benefits. This means a retiree who earns self-employment income must still pay the tax if earnings reach the filing threshold. The policy reflects the fact that SE tax funds the same programs that benefit all workers, and receiving benefits from those programs does not relieve the obligation to contribute. The full 15.3% rate applies to 92.35% of net earnings, just as it does for younger workers.
The SE tax rules apply no matter how old you are and even if you are already receiving social secur- ity or Medicare benefits.
Publication 334 (2023), Tax Guide for Small Business (IRS)
Half the tax comes back as an adjustment to income
Self-employment tax is structured so that half the burden is offset by an income tax deduction. You deduct one-half of your SE tax as an adjustment to income on line 15 of Schedule 1 (Form 1040). This is called an "above-the-line" deduction, meaning you can claim it whether or not you itemize. The logic is that the employer share of Social Security and Medicare taxes is deductible for a business, and a self-employed person effectively fills both the employer and employee roles. By allowing the deduction of one-half of the 15.3% rate, the code approximates the treatment given to employees and employers.
Deduct one-half of your SE tax as an adjustment to income on line 15 of Schedule 1 (Form 1040).
Publication 334 (2023), Tax Guide for Small Business (IRS)
Only 92.35% of net earnings is actually taxed
Not all of your self-employment income is subject to tax. To figure net earnings using the regular method, multiply your self-employment earnings by 92.35% (0.9235). This reduction accounts for the employer share of the tax that a self-employed person effectively pays. In an employment relationship, the employer pays half the Social Security and Medicare tax on top of wages; the 92.35% factor replicates that structure so that only the employee-side portion is fully taxed. The resulting figure is the amount to which the 15.3% rate - 12.4% for Social Security and 2.9% for Medicare - is applied.
To figure net earnings using the regular method, multiply your self-employment earnings by 92.35% (0.9235).
Publication 334 (2023), Tax Guide for Small Business (IRS)
Nobody withholds it, so you pay it quarterly
Because no employer is withholding self-employment tax from your pay, you are responsible for paying it yourself throughout the year. You generally have to make estimated tax payments if you expect to owe taxes, including self-employment tax, of $1,000 or more when you file your return. Use Form 1040-ES to figure and pay the tax. The payments are due quarterly. If you fail to pay enough through withholding or estimated payments, you may face a penalty for underpayment. The requirement exists because the U.S. tax system is pay-as-you-go; you cannot wait until April to settle the full 15.3% obligation on your net earnings.
Estimated tax payments. You generally have to make estimated tax payments if you expect to owe taxes, includ- ing self-employment tax (discussed later), of $1,000 or more when you file your return.
Publication 334 (2023), Tax Guide for Small Business (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Publication 334 (2023), Tax Guide for Small Business (IRS)
- Rate
SE tax rate. The SE tax rate on net earnings is 15.3% (12.4% social security tax plus 2.9% Medicare tax).
SE tax rate. The SE tax rate on net earnings is 15.3% (12.4% social security tax plus 2.9% Medicare tax).
- Medicare rate
SE tax rate. The SE tax rate on net earnings is 15.3% (12.4% social security tax plus 2.9% Medicare tax).
To figure net earnings using the regular method, multiply your self-employment earnings by 92.35% (0.9235).