Question

Why might a gig worker pay more in taxes than an employee who earns the same total pay?

(1 point)
Responses

Gig workers are placed in a much higher tax bracket.
Gig workers are placed in a much higher tax bracket.

Gig workers cannot deduct any of their business costs.
Gig workers cannot deduct any of their business costs.

Gig workers pay both employee and employer tax portions.
Gig workers pay both employee and employer tax portions.

Gig workers are not eligible for standard tax deductions.
Gig workers are not eligible for standard tax deductions.

Answer 1

Gig workers pay both employee and employer tax portions.

Explanation: As self-employed, they owe the full Social Security and Medicare taxes (self-employment tax), whereas employees only pay the employee half—the employer pays the other half.