What is the total self-employed tax rate, including employer-matching contributions?

• A. 15.3%
• B. 12.4%
• C. 2.9%
• D. 7.65%

Answer: (D)

Self-employment tax combines both halves of the FICA taxes for Social Security and Medicare. The Social Security portion is 12.4% and the Medicare portion is 2.9%, so together they total 15.3% on your net earnings from self-employment. Because you’re self-employed, you’re effectively paying both the employee and the employer share, which is why the combined rate is 15.3%. The 7.65% figure would be only half of that—the portion an employee would pay (or the portion an employer would contribute). You can deduct half of your self-employment tax when figuring your income tax, but the SE tax rate itself remains 15.3%.