Regardless if you're self-employed or an employee, you have to pay Social Security and Medicare taxes to the government. When you work for someone else, you're only responsible for part of these taxes, while your employer pays the balance (you pay about 7.65% and your employer pays about 7.65%) However, when you're self-employed, you have to pay both portions of this tax, which amounts to about 15.3%.
PAYROLL TAX BURDEN AS AN EMPLOYEE
Self-employment tax burden as an entrepreneur
7.65%
7.65%
15.3%
Employee's Tax Burden
Employer's Tax Burden
