LumenWhat is the US self-employment tax rate, and do foreigners have to pay it?
Checked on
The US self-employment tax rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare. You owe it, and file Schedule SE, once net earnings from self-employment reach $400. Resident aliens pay it under the same rules as citizens; nonresident aliens don't, unless a social security agreement covers them under the US system.
Key facts
| What | IRS guidance says | Source |
|---|---|---|
| Rate | 15.3%: 12.4% Social Security (old-age, survivors and disability insurance) plus 2.9% Medicare (hospital insurance) | IRS, Self-employment tax: Self-employment tax rate |
| Who must pay | Anyone with net earnings from self-employment of $400 or more; you then file Schedule SE (Form 1040) | IRS, Self-employment tax: Who must pay; Instructions for Schedule SE (2025) |
| Social Security cap | For 2025, the maximum self-employment income subject to the Social Security part is $176,100; the Medicare part has no cap | Instructions for Schedule SE (2025); IRS, Self-employment tax |
| Additional Medicare Tax | 0.9% on self-employment income above $250,000 (married filing jointly), $125,000 (married filing separately), $200,000 (single, head of household, qualifying surviving spouse) | IRS, Self-employment tax; Pub. 519, ch. 8 |
| Deduction | The employer-equivalent portion of self-employment tax is deductible when figuring adjusted gross income; no part of the Additional Medicare Tax is | IRS, Self-employment tax deduction; Pub. 519, ch. 8 |
| Resident aliens | Pay under the same rules as US citizens | Pub. 519, ch. 8, Self-Employment Tax |
| Nonresident aliens | Not subject to it, unless an international social security agreement covers them under the US system | Pub. 519, ch. 8, Self-Employment Tax |
| Taxpayer number | You need an SSN or an ITIN to pay it | IRS, Self-employment tax: How do I pay |
What the tax is
The IRS describes self-employment tax as the Social Security and Medicare taxes for people who work for themselves, the counterpart of what is withheld from employees’ pay. You figure it yourself on Schedule SE and attach it to Form 1040, 1040-SR or 1040-NR. Sole proprietors and independent contractors generally figure their net earnings on Schedule C first. The IRS says the rules apply whatever your age, even if you already receive Social Security or Medicare.
If you are not a US citizen
IRS Publication 519 makes your tax residency the deciding point:
- Resident alien (green card holder or someone who meets the substantial presence test): you pay self-employment tax exactly like a citizen. Income received while you are resident is taxed even if it pays for work you did before, as a nonresident.
- Nonresident alien: you are not subject to self-employment tax, unless an international social security agreement in force says you are covered by the US system.
Social security agreements (“totalization agreements”)
The IRS says these agreements stop double social security contributions for the same work. Under most of them, a self-employed person is covered by the system of the country where they reside; some let you stay exempt from US self-employment tax when you temporarily move your business activity to or from the US. To show your income is taxed only abroad, get a Certificate of Coverage from the foreign country’s agency, attach a copy to Form 1040 or 1040-SR every exempt year, and write “Exempt, see attached statement” on the self-employment tax line.
How you pay it
You pay it through your return and, during the year, usually through quarterly estimated tax payments (see the estimated tax page).
Related questions
- Whether you are a resident or nonresident alien depends on the green card and substantial presence tests (see the tax residency page).
- No SSN? The IRS issues an ITIN on Form W-7 (see the ITIN page).
Sources
Change history
- : Page created
This is general information, not legal advice, and Lumen is not a law firm. Rules change and offices differ: check the official sources above before you act. Found something wrong or out of date? Write to support@lumen.observer.