Tax Information

2003 Social Security Self-Employment Tax Rates

The FICA tax, also known as the Social Security tax, is paid equally by an employer and employee. Since a self-employed individual (sole proprietor or partner) is both employer and employee, the self- employed must pay the entire tax on their net earnings from self-employment.

Like the FICA tax, the self-employment tax is composed of two elements:

1. OASDI -- The old age, survivor and disability portion of the tax is paid on net earnings from self-employment up to the maximum covered wage base for the year.

2. HI -- The hospital insurance or Medicare portion of the tax is paid on all net earnings from self-employment, without limit.

2003 Self-Employment Tax Rates

	OASDI Portion		HIPortion
Paid by:	2003 Tax Rate	2003 Covered Wage Base	2003 Tax Rate	2003 Covered Wage Base	Total Tax Rate
Self-Employed Individuals	12.40%	$87,000	2.90%	all net earnings from self-employment	15.30%

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