Self-employed individuals abroad are generally subject to the self-employment tax, which is a social security and Medicare tax on net earnings from self-employment of $400 or more a year. Net self-employment income is used to figure the net earnings from self-employment. Net self-employment income includes all business income less all business deduction allowed for income tax purposes. A taxpayer must take all self-employment income into account in figuring the net earnings from self-employment, even income that is exempt from income tax because of the foreign earned income exclusion.
As a general rule, self-employed people who are subject to dual taxation will only be covered by the social security system of the country where they reside.