Glossary
Self-Employment Tax
For those self-employed, FICA might not affect them directly, but they are required to pay tax just the same. Social Security and Medicare still need to be paid by an individual’s earnings.
Now while the average industry worker has this automatically deducted by their employer, a secret and mysterious process akin to the mystery of how the sausage is made, and just as revolting a truth, self-employed individuals must make their own sausage, er, must deduct their own taxes, as it is not automatically withheld.
The tax is 15.3%, as a lump sum tax between the two causes, collected annually by the government or periodically throughout the year.