For Social Security purposes, wages are the earnings you receive from working for someone else as an employee. Self-employment income, on the other hand, is the income you earn from operating your own business or being an independent contractor. Self-employment income includes profits from your business, as well as any wages you pay to employees. Social Security taxes are paid differently on wages and self-employment income. Employees have Social Security taxes withheld from their paychecks by their employers, while self-employed individuals must pay both the employer and employee share of Social Security taxes (self-employment tax) directly to the IRS.