Self-Employment Tax Explained: What Side Gig Income Costs

When you earn income from a side gig or as a self-employed person, you owe the full 15.3 percent FICA tax because you are acting as both the employer and the employee. In this episode, Ryan explains how W-2 employees split this burden 50-50 with their employer, and why that hidden employer contribution disappears the moment you work for yourself.Ryan and Aaron walk through the Social Security and Medicare components of self-employment tax, when Social Security contributions phase out at higher income levels, and what to watch for with the Medicare surcharge above $200,000. If you have a side hustle and are not setting aside enough for taxes, this episode shows you exactly what you are on the hook for. This is education, not personal advice, so consult a CPA about your specific self-employment tax situation.Find "Your Fiscal Physical" the book on AmazonIf you have suggestions or feedback, please email us at: [email protected], as always, Stay the Course!