The law sets the self-employment tax rate as a percentage of your net earnings from self-employment. This rate consists of 12.4% for social security and 2.9% for Medicare taxes. The maximum amount of net earnings subject to the 12.4% social security portion of the self-employment (SE) tax for 2023 is $160,200. All net earnings of at least $400 are subject to the Medicare part of the tax.

Self-Employment Income is income from:

• Sole proprietorship business (Schedule C (Form 1040) Profit or Loss From Business)
• Farm (Schedule F (Form 1040) Profit or Loss From Farming)
• Certain partnership income and guaranteed payments (Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc.)
• Church employee (lay persons) income of $108.28 or more
• Income for services performed as a minister or a member of a religious order

See Topic No. 554 Self-Employment Tax and Understanding Employment Taxes for detailed information.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.