Enter your numbers to see who wins
Real take-home comparison after all taxes and benefits
W2 Employee Offer
Avg employer contribution: $7,000–$15,000/yr
Typical: 3–6% of salary
1099 Contractor Offer
Individual market: $3,000–$12,000/yr
Software, equipment, home office, etc.
Your Comparison Results
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⚠ Note: This calculator uses simplified federal income tax estimates and 2026 SE tax rates (IRS Schedule SE). Actual take-home depends on filing status, state taxes, deductions, and retirement contributions. Consult a CPA for precise comparison.
1099 vs W2 FAQ
1099 contractors pay the full 15.3% self-employment tax (vs. employees paying half at 7.65%). Contractors also pay for their own health insurance, receive no paid vacation, no 401k match, and bear all business expenses. A 1099 rate needs to be 20–40% higher than an equivalent W2 salary to produce the same take-home pay.
It depends on your priorities. W2 provides stability — employer handles half your FICA taxes, provides health insurance, 401k match, and paid time off. 1099 offers flexibility and higher gross potential, but you bear full 15.3% self-employment tax, buy your own health insurance, and fund your own retirement. W2 wins on security; 1099 wins on earning potential if you charge enough. Use the calculator above to find your exact break-even point.
Typically 20–40% more. For a $70,000 W2 salary, expect to need $88,000–$100,000 as a 1099 to match take-home. For a $100,000 W2, plan on $125,000–$140,000 as a 1099. The calculator above gives you the exact number for your situation.
There is no separate “1099 tax rate.” 1099 contractors pay the same federal income tax brackets as W2 employees (10% to 37% in 2026). The real difference is self-employment tax: contractors pay the full 15.3% themselves, while W2 employees only pay half (7.65%) because employers cover the rest. This is why 1099 income needs to be meaningfully higher than a W2 salary to produce equal take-home pay.
Multiply your net self-employment profit by 92.35% to get net earnings subject to SE tax (the IRS Schedule SE formula). Then apply 15.3% to the portion up to $184,500 plus 2.9% above that. Example: $90,000 net profit × 92.35% = $83,115 subject to SE tax; $83,115 × 15.3% = $12,717 SE tax. You can deduct half ($6,358) as an above-the-line adjustment to reduce federal taxable income.
Maybe, but it is risky. The IRS uses behavioral control, financial control, and relationship type factors. Working exclusively for one company full-time often looks like employment. Misclassification can result in back taxes, penalties, and the company owing back payroll taxes.
You receive full payment with NO taxes withheld. You owe quarterly estimated taxes (April 15, June 15, Sept 15, Jan 15). You pay self-employment tax (15.3% on first $184,500 in 2026). You file Schedule C and can deduct legitimate business expenses. Set aside 25–30% of gross income for taxes.
No. 1099 contractors receive no paid vacation, sick leave, or holidays. If you take 25 unpaid days per year, that is roughly 10% of your working year. A contractor billing $95,000/year who takes 25 unpaid days effectively earns closer to $86,500 in comparable W2 value. Always factor this into rate negotiations.
Common deductible expenses on Schedule C: home office ($5/sq ft up to 300 sq ft), equipment and technology, software subscriptions, professional development, business portion of phone, and business travel. Health insurance premiums are deductible from adjusted gross income. SEP-IRA contributions shelter up to 25% of net self-employment income (max $69,000 in 2026).
Self-employment tax is 15.3% on net self-employment earnings up to $184,500 in 2026 (12.4% Social Security + 2.9% Medicare). Above $184,500, only 2.9% Medicare applies. W2 employees only pay 7.65% because employers pay the other half. You can deduct half of SE tax from your adjusted gross income.