Definition: Individuals who work for themselves are typically required to pay self-employment tax or SE tax on their earnings. The IRS defines this as a social security and Medicare tax, similar to what employers withhold from employees' earnings.
For the 2007 tax year, the self-employment tax rate is 15.3 percent of gross earnings. This includes 12.4 percent to cover social security and 2.9 percent for Medicaid.
Also Known As: Self-employment taxes
