Sole Proprietors will be assessed an annual contribution on their earnings.
After an exemption, the Self-Employment Contribution is 2% of Adjusted Net Earnings.
- The exemption is $15,000 – (Adjusted Net Earnings x 0.25)
- The exemption would not apply for Net Earnings above $60,000.
Calculation Example
Paul is in business for himself and nets $55,000 per year.
- Paul’s Self-Employment Contribution
- $55,000 x 0.25 = $13,750
- $15,000 – $13,750 = $1.250
- ($55,000 – $1,250) x 2% = $1,075/yr or approx. $89/mo
See Page 31 – Section 203.3 of the full bill text for details.