What is the tax rate for self-employment income?

In Washington State, the tax rate on self-employment income depends on the amount of income you earn. The state’s income tax rate is a flat rate of 7.9% for all taxpayers, regardless of the level of income earned. For those who have an income of $250,000 or more, there is an additional 1.8% tax rate in addition to the 7.9% rate to make a total rate of 9.7%. Self-employed individuals are also subject to the state’s business and occupation (B&O) tax. This is a tax based on the amount of gross revenues or sales of your business. Generally, the rate is 0.471% of your total self-employment income, with some exceptions. For example, for a business dealing in retail sales, the rate is 0.484%. If you are a self-employed individual in Washington, you must also pay Social Security and Medicare taxes. This is in addition to the federal taxes that all taxpayers must pay. The Social Security tax rate is 12.4% and the Medicare tax rate is 2.9%. In summary, the tax rate self-employed individuals can expect to pay in Washington State is a combination of the state income tax rate of 7.9% (or 9.7% if the income threshold of $250,000 is met); the B&O tax rate typically of 0.471%, and the Social Security and Medicare taxes rate of 15.3%.

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