What percentage must self-employed individuals pay in government deductions?

Self-employed individuals are required to pay 15.3% in government deductions, which encompasses both Social Security and Medicare taxes. This figure represents the self-employment tax rate, which is the equivalent of the combined 7.65% that employees and employers each pay for Social Security and Medicare. Since self-employed individuals must cover both portions, the rate effectively doubles, leading to the total of 15.3%.

This tax rate is crucial for self-employed individuals as it ensures that they contribute to these social safety nets just like traditional employees. Understanding this obligation helps in accurately estimating tax liabilities and budgeting appropriately for self-employment income. The other options do not reflect the accurate percentage required for self-employment tax, making the 15.3% the correct amount that needs to be accounted for in financial planning.