Unfortunately, yes. You need to pay what's known as a "Self-Employment Tax." When you are a W-2 employee, your employer withholds your Social Security and Medicare taxes from your paychecks. The amount withheld is 7.65% of your pay. The employer then matches this amount. As an independent contractor though, you are responsible for paying the entirety of the 15.3% tax burden. You will need to do so by making quarterly estimated payments to the IRS. So, let's say that you complete work as an independent contractor. You earn $1,000 between January and March. At the end of the quarter, you will need to pay 15.3%, or $153, in Social Security and Medicare taxes. You will also need to pay federal and state income taxes as well. However, this should not deter you from taking on a side hustle. Freelancers and independent contractors have higher gross earnings than waged employees, as customers know that the contractor is solely responsible for paying taxes.