Self-Employment Tax is a tax that individuals who work for themselves must pay. This tax covers Social Security and Medicare taxes, which are typically withheld from employees' paychecks by their employers. If you earn $400 or more from self-employment, you are required to file a tax return and pay this tax. The current self-employment tax rate is 15.3%, which includes 12.4% for Social Security and 2.9% for Medicare. It's important for self-employed individuals to keep accurate records of their income and expenses to calculate their tax liability correctly. This tax is reported on IRS Form 1040 and Schedule SE.