If you work for yourself in the U.S., you pay two federal taxes on your profit: income tax and self-employment tax. An employee has both withheld from each paycheck; a self-employed person calculates and pays them personally.
Self-Employment Tax
Self-employment (SE) tax is the Social Security and Medicare tax of people who work for themselves. The rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare. You owe it, and must file a return, once your net earnings from self-employment are $400 or more in the year. You may deduct the employer-equivalent part of the tax when you work out your adjusted gross income.
What You File
- Schedule C (Form 1040): the income and expenses of the business, which gives the net profit
- Schedule SE (Form 1040): the self-employment tax on that profit
- Form 1040-ES: estimated tax paid in four instalments during the year, since nothing is withheld for you
Which Tax Number You Need
To pay SE tax you need a Social Security number or an ITIN. A sole proprietor needs an EIN as well only in certain cases, such as hiring employees; see EIN for a sole proprietorship. If you are not eligible for an SSN, the ITIN is applied for on Form W-7; see our ITIN application service.
Non-Residents
Non-resident aliens are generally not subject to self-employment tax, although they may owe income tax on U.S. earnings and file Form 1040-NR. Social security agreements between the U.S. and some countries change this for certain workers. See who needs to file a U.S. tax return.
Source: IRS, Self-employment tax (Social Security and Medicare taxes). Checked October 2026.
