784 / Who must pay the self-employment tax?
An individual whose net earnings from self-employment are $400 or more for the taxable year must pay the self-employment tax.1 In 2025, such an individual must file a Schedule SE and pay Social Security taxes on up to $176,100 of self-employment income.
The hospital insurance tax is imposed on all of a taxpayer’s self-employment income. However, an above-the-line deduction is permitted for one-half of the self-employment tax paid by an individual and attributable to a trade or business carried on by the individual (not as an employee).2 If the individual also works in covered employment as an employee, his self-employment income (subject to the self-employment tax) is only the difference, if any, between his “wages” as an employee and the maximum Social Security earnings base.
1. IRC § 6017.
2. IRC § 164(f).