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History of Self-Employment Tax Rates: 1951-2017

Did you know that the self-employment tax rate was a mere 2.25% on $3,600 from 1951-1953 for a total tax of $81.00. Back then, Medicare did not exist.

 

Low tax rates never seem to stick. It might be the camel’s nose under the tent theory. You know, once the camel gets its nose under the tent, the next thing you know is that you have the camel in the tent.

 

The self-employment tax very much follows the camel theory starting at a maximum of $81 in 1951 and growing to a 2017 maximum of $19,461.60, plus 2.9 percent on any excess above $127,200.1

 

Furthermore, since 2013, if you make over $200,000 ($250,000 for Married Filing Joint and $125,000 for Married Filing Separately) in net self-employment earnings, the federal government will tack on another 0.9% additional Medicare tax.

 

Watch the Taxes Increase

 

 

Tax Rates Through the Years

 

Self Employment Tax Rates: 1951-2017

Year

Social Security Tax (%)

Medicare Tax (%)

Total (%)

Max Earnings Subject to Self-Employment Tax

Total Tax

1951

2.250

0.00

2.250

$3,600

$81.00

1952

2.250

0.00

2.250

$3,600

$81.00

1953

2.250

0.00

2.250

$3,600

$81.00

1954

3.000

0.00

3.000

$3,600

$108.00

1955

3.000

0.00

3.000

$4,200

$126.00

1956

3.000

0.00

3.000

$4,200

$126.00

1957

3.375

0.00

3.375

$4,200

$141.75

1958

3.375

0.00

3.375

$4,200

$141.75

1959

3.750

0.00

3.750

$4,800

$162.00

1960

4.500

0.00

4.500

$4,800

$216.00

1961

4.500

0.00

4.500

$4,800

$216.00

1962

4.700

0.00

4.700

$4,800

$225.60

1963

5.400

0.00

5.400

$4,800

$259.20

1964

5.400

0.00

5.400

$4,800

$259.20

1965

5.400

0.00

5.400

$4,800

$259.20

1966

5.800

0.35

6.150

$6,600

$405.90

1967

5.900

0.50

6.400

$6,600

$422.40

1968

5.800

0.60

6.400

$7,800

$499.20

1969

6.300

0.60

6.900

$7,800

$538.20

1970

6.300

0.60

6.900

$7,800

$538.20

1971

6.900

0.60

7.500

$7,800

$585.00

1972

6.900

0.60

7.500

$9,000

$675.00

1973

7.000

1.00

8.000

$10,800

$864.00

1974

7.000

0.90

7.900

$13,200

$1,042.80

1975

7.000

0.90

7.900

$14,100

$1,113.90

1976

7.000

0.90

7.900

$15,300

$1,208.70

1977

7.000

0.90

7.900

$16,500

$1,303.50

1978

7.100

1.00

8.100

$17,700

$1,433.70

1979

7.050

1.05

8.100

$22,900

$1,854.90

1980

7.050

1.05

8.100

$25,900

$2,097.90

1981

8.000

1.30

9.300

$29,700

$2,762.10

1982

8.050

1.30

9.350

$32,400

$3,029.40

1983

8.050

1.30

9.350

$35,700

$3,337.95

1984

8.700

2.60

11.30

$37,800

$4,271.40

1985

9.100

2.70

11.80

$39,600

$4,672.80

1986

9.400

2.90

12.30

$42,000

$5,166.00

1987

9.400

2.90

12.30

$43,800

$5,387.40

1988

10.12

2.90

13.02

$45,000

$5,859.00

1989

10.12

2.90

13.02

$48,000

$6,249.60

1990

12.40

2.90

15.30

$51,300

$7,848.90

1991

12.40

2.90

15.30

$53,400

$8,170.20

1992

12.40

2.90

15.30

$55,500

$8,491.50

1993

12.40

2.90

15.30

$57,600

$8,812.80

1994

12.40

2.90

15.30

$60,600

$9,271.80

1995

12.40

2.90

15.30

$61,200

$9,363.60

1996

12.40

2.90

15.30

$62,700

$9,593.10

1997

12.40

2.90

15.30

$65,400

$10,006.20

1998

12.40

2.90

15.30

$68,400

$10,465.20

1999

12.40

2.90

15.30

$72,600

$11,107.80

2000

12.40

2.90

15.30

$76,200

$11,658.60

2001

12.40

2.90

15.30

$80,400

$12,301.20

2002

12.40

2.90

15.30

$84,900

$12,989.70

2003

12.40

2.90

15.30

$87,000

$13,311.00

2004

12.40

2.90

15.30

$87,900

$13,448.70

2005

12.40

2.90

15.30

$90,000

$13,770.00

2006

12.40

2.90

15.30

$94,200

$14,412.60

2007

12.40

2.90

15.30

$97,500

$14,917.50

2008

12.40

2.90

15.30

$102,000

$15,606.00

2009

12.40

2.90

15.30

$106,800

$16,340.40

2010

12.40

2.90

15.30

$106,800

$16,340.40

2011

10.40

2.90

13.30

$106,800

$14,204.40

2012

10.40

2.90

13.30

$110,100

$14,643.30

2013

12.40

2.90

15.30

$113,700

$17,396.10

2014

12.40

2.90

15.30

$117,000

$17,901.00

2015

12.40

2.90

15.30

$118,500

$18,130.50

2016

12.40

2.90

15.30

$118,500

$18,130.50

2017

12.40

2.90

15.30

$127,200

$19,461.60

 

Chart does not take into account any possible 0.9% additional Medicare tax for 2013 – 2017. No part of the 0.9% additional Medicare tax can be used as a self-employment tax adjustment.

 


 

1    Because only 92.35 percent of self-employment income is taxed on Schedule SE, the effective rates of tax are 14.13 percent on self-employment earnings and 2.68 percent on Medicare earnings above the base amount (excluding the new Additional Medicare Tax of 0.9% which does not figure into Schedule SE). Also, because only 92.35 percent of self-employment income is taxed, the true upper limit for the 14.13 percent is $137,737.