BREAKING DOWN ‘Self Employed Contributions Act Tax – SECA Tax’
The Self-Employment Contributions Act (SECA) of 1954 is a tax law that requires self-employed persons or owners of small businesses to pay both the employer and employee portions of the Federal Insurance Contributions Act (FICA) tax that funds Social Security and Medicare. The basic tax rate for SECA tax payments is twice the percentage rate that employees pay at source from their paychecks in order to cover both the employer and employee portion of the payment.
