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Taxes

Self-Employment Tax

Also called: SE tax, class 4 national insurance

Self-employment tax is both halves of FICA — 15.3% — paid by people with no employer to cover the other half. It applies to net business profit, not revenue, and half of it is deductible against income tax as a partial offset. It's the single biggest surprise for new freelancers, who budget for income tax and then discover another 15% owed on the same money.

Formula

SE tax = 15.3% × 92.35% of net self-employment profit

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