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Is more tax really being paid or is it simply that freelancers become responsible for paying employer payroll taxes? In the US both employees and employers pay
by laurencerowe 5y ago
Is more tax really being paid or is it simply that freelancers become responsible for paying employer payroll taxes?
In the US both employees and employers pay social security contributions. Going freelance here means you must pay both of these, double the amount an employee would see withheld from their paycheck. But it's not an extra tax. The government is still getting the same amount of money in total.
As a freelancer you need to set your rates appropriately to account for the payroll tax, PTO, etc. that would be paid if you were an FTE.