Most solopreneurs don’t realize they’re losing 15.3% of their profit before they even start investing.
That’s the self-employment tax — the hidden “payroll tax” you pay when you work for yourself.
In other words, you’re both the employer and the employee.
Let’s fix that.
🧾 Meet the 15.3% Monster
If you make $100K as an independent contractor, you owe about $15,300 in self-employment tax.
Breakdown:
↳ 12.4% for Social Security (up to ~$168,600 of income)
↳ 2.9% for Medicare
↳ +0.9% extra Medicare tax over $200K
Employees only pay half (7.65%) because their company pays the other half.
But when you’re self-employed? You’re on the hook for both sides.
That’s why this monster quietly eats so many freelancers’ profits.
🧱 Step 1: Change the Game (Elect an S-Corp)
If your business nets $40K+ per year, you’re ready for a new structure.
Instead of paying 15.3% on every dollar as a sole proprietor, you can
