system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5:WHY is the self-employment tax rate higher than the regular tax rate?
gpt
I assume you're talking about FICA taxes, which pay for social security and medicare. For employees, 7.65% of the employee's paycheck is put towards those taxes and the employer pays 7.65% of the paycheck out of their own pocket. (Actually, 8.55% for the employee if the employee makes over $200,000/year).

When you're self-employed you have to pay the full 15.3% for social security and medicare taxes because you don't have an employer covering the other half. However, you get to claim business deductions, which can help lower your taxable income.