Nope that tax is always there.  Your employer covers most of it mainly in social security/medicare and a C or S corp will pay out of their coffers for that.  So most full-time workers never see that hidden 15% but it is blatantly there when you contract, self-employ, LLC etc.<p><i>SE tax rate. The self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance).</i><p><a href="http://www.irs.gov/businesses/small/article/0,,id=98846,00.html" rel="nofollow">http://www.irs.gov/businesses/small/article/0,,id=98846,00.h...</a><p>When I contract, sell products etc. I expect to get about 55% of the revenue after taxes.  That is actually a bit low but it is a good number to use to make sure you are charging enough.  So if you work for $70/hr you are actually working for about $40/hr and so on.