Free Online Calculator

1099 vs W-2 Calculator

See what a 1099 contract offer really pays after self-employment tax, benefits, and payroll taxes. Compare it against the take-home of a W-2 salary. Free, no signup.

Gross salary before taxes and deductions.
For a 1099, you are paid for what you bill, not what you work.
Health insurance, 401k match, paid leave, equipment.
Employer share of FICA, used to value the W-2 cost to the company.
W-2 take-home after tax
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1099 gross earnings
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1099 take-home after tax
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W-2 total value incl. benefits—
W-2 cost to employer—
Difference (1099 − W-2)—
1099 hourly break-even vs W-2—

Assumes Single, no dependents, and no state tax. A 1099 offers no benefits and shifts payroll taxes, unemployment insurance, and workers' comp onto you.

For planning purposes. This tool produces an estimate to help you plan, not a filed return. Your real result can differ once credits, deductions, and individual circumstances are applied. Confirm important decisions with a qualified professional.

About this calculator

The headline number on a contractor offer is misleading. A W-2 salary is matched by benefits your employer pays, and the employee half of FICA comes out pre-tax. A 1099 pays no benefits, charges you the employer half of FICA, and leaves you paying unemployment insurance and your own workers' comp coverage.

How it works

The calculator values the W-2 on three bases: take-home cash, take-home plus benefits, and the total cost to the employer. The 1099 is taxed as self-employment income on 92.35% of earnings. The difference between the two take-homes is the number that matters when comparing offers.

Frequently asked questions

Is a 1099 better than a W-2?

A 1099 pays more gross for the same work, but you lose benefits and pay roughly 7.65% more in payroll tax. Many contractors come out ahead; many employees with good benefits do not. Compare total value, not the rate.

What is self-employment tax on a 1099?

Self-employment tax is 15.3% on 92.35% of net earnings: 12.4% Social Security up to the $184,500 wage base plus 2.9% Medicare. Half of it is deductible, so the real net cost is a little under 13%.

Does a 1099 affect your ability to get a mortgage?

It can. Lenders want to see stable income, and 1099 income is treated as self-employment income that is averaged over 24 months and verified with tax returns. Two years of consistent 1099 work usually satisfies this.

What benefits do I lose as a 1099?

Employer-paid health insurance, retirement contributions and match, paid leave, and any stipend. You can sometimes offset this by setting up your own SEP-IRA or Solo 401(k), which are deductible.

Can a company require me to be a 1099 contractor?

Classification depends on how the working relationship actually behaves, not on the label. If you are controlled, work set hours, use the company's tools, and are economically dependent, a misclassification is common. The IRS has a specific test for this.

Should I charge a 1099 rate 30% higher?

A common rule of thumb. The actual break-even depends on your tax bracket, the value of the benefits you give up, and your business expenses. This calculator solves for the true number instead of guessing.

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