Self-Employment Tax Rates for 2013, 2012, and 2011

Self-employed Persons

For 2013, the self-employment rate reverts back to its pre-2011 rate, 15.3%, made up of:

  • Social security rate: 12.4% plus
  • Medicare rate: 2.9%.

Employers and Employees

For 2011 and 2012, the employee's share of the social security tax was reduced 2%, to 4.2% (.042). The employer's share of the social security tax remained unchanged at 6.2%. The social security tax break did not apply to the Medicare tax which remained 2.9% (employer and employee each pay 1.45%, one half of the 2.9%).

To reflect the 2% rate reduction in the social security tax that employees received in 2011 and 2012, the social security portion of the self-employment tax was also reduced 2%.

As a result of the 2% rate reduction, the total self-employment tax for 2011 and 2012 was 13.3%, made up of:

  • Social security rate: 10.4%
  • Medicare rate: 2.9%

Social Security Wage Base for 2013, 2012, and 2011

  • 2013: $113,700
  • 2012: $110,100
  • 2011: $106,800

For Medicare taxes there is no limit on the amount of earned income that may be taxed. .

Additional .9% (.009) Tax on Medicare Beginning 2013

Beginning in 2013, high income earners will be hit with an extra .9% (.009) Medicare tax. The additional .9% kicks in when income thresholds reach the following:

  • Salary and/or self-employment income above $200,000 for a single filer.
  • Salary and/or self-employment income over $250,000 for couples filing a joint return.
  • Salary and/or self-employment income above $125,000 for married individuals filing separate returns.

These thresholds will not be adjusted for inflation. 

Self-employed people pay the additional .9% via their self-employment tax. Unfortunately, the additional .9 percent won't qualify for a deduction on Form 1040 (the above-the-line deduction for self-employment tax). The additional .9 percent Medicare tax must be taken into account for estimated tax purposes.

The regular Medicare tax rate for lower income taxpayers remains 2.9% (1.45% for the employer's share and 1.45% for the employee's share. Self-employed persons pay the entire 2.9% via the self-employment tax computed on Schedule SE)

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