Theoretically, your employer pays half the employment taxes and you pay the other half. When you are self-employed you must pay all of them. Of course, this simply equates to W2 employees being paid less income.
There's a (roughly) 15% tax on income that covers social security and medicare. As an employee, 7.5% of this comes out of your paycheck, and your employer has to match the other 7.5%. When you're self-employed, you need to pay both ends of this (unless you start getting tricky with the way you incorporate)
