W-2 vs 1099 Comparison Calculator
Compare take-home pay as a W-2 employee vs 1099 contractor. Find the equivalent 1099 rate to match your W-2 salary.
By Konstantin Iakovlev · Updated September 2026 · Source: IRS — Small Business & Self-Employed
W-2 Net Income
$68,500.00
1099 Net Income
$67,747.45
W-2 Advantage
$752.55
Break-Even 1099 Rate
$101,081.88/yr
$48.60/hr
W-2 Equivalent Hourly
$48.08/hr
Side-by-Side Comparison
| W-2 | 1099 | |
| Gross Income | $100,000.00 | $100,000.00 |
| FICA / SE Tax | $7,650.00 | $14,129.55 |
| 1099 QBI deduction (20%) | — | $12,967.05 |
| Federal Income Tax | $11,850.00 | $6,123.00 |
| Total Tax | $19,500.00 | $20,252.55 |
| Health Insurance | $6,000.00 | $6,000.00 |
| Retirement | $6,000.00 | $6,000.00 |
| Net Take-Home | $68,500.00 | $67,747.45 |
Hidden Costs of 1099
| Additional SE Tax (vs W-2 FICA) | $6,479.55 |
| Employer FICA You Lose | $7,650.00 |
| No employer health subsidy | Varies |
| No employer 401(k) match | Varies |
| No paid time off / benefits | Varies |
| Quarterly estimated tax payments | Required |
Break-Even 1099 Rate
To match your W-2 take-home of $68,500.00, you would need to earn at least $101,081.88 as a 1099 contractor ($48.60/hr). This accounts for additional SE tax but does not include the value of employer benefits like health insurance subsidies, 401(k) match, or paid time off.
Use the W-2 vs 1099 Comparison Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.
Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.
How It Works
Deciding between a W-2 role and 1099 contract work comes down to what you actually keep after taxes, health insurance and retirement savings, and this tool puts the two side by side.
The calculator applies the same gross income, health insurance cost and retirement contribution to both sides. A W-2 employee splits the 15.3% FICA tax with the employer and pays 7.65%, plus federal income tax on gross minus the 2026 standard deduction and the retirement contribution. A 1099 contractor pays the full 15.3% self-employment tax on 92.35% of income, then deducts half of that tax, the health premiums, the retirement contribution and the 20% qualified business income deduction before federal income tax (capped at 20% of taxable income and, for a contractor with no employees, phased out between $201,750 and $276,750 of taxable income, $403,500 and $553,500 joint). State income tax and business expenses are left out, so enter your net profit after expenses as the 1099 income.
One thing contractors cannot skip is quarterly estimated tax payments; the 1099 Total Tax line is a starting point for what to set aside, before state tax. Expenses are easy to undercount, too, since equipment, software subscriptions, and home office costs add up and tilt the comparison. For tangled situations, multiple income streams or large deductions, a tax professional is worth the call.
Example: $100,000 as a W-2 Employee vs a 1099 Contractor (Single, 2026)
- 1 Input: $100,000 gross either way, filing single, with $6,000 of health insurance premiums and a $6,000 retirement contribution on both sides.
- 2 W-2: FICA 7.65% = $7,650. Taxable income $100,000 − $16,100 standard deduction − $6,000 retirement = $77,900, and federal tax on it is $11,850. Take-home: $100,000 − $7,650 − $11,850 − $6,000 − $6,000 = $68,500.
- 3 1099: self-employment tax $100,000 × 92.35% × 15.3% = $14,129.55. Before the QBI deduction, taxable income is $100,000 − $16,100 − $7,064.78 (half the SE tax) − $6,000 − $6,000 = $64,835.23. The 20% qualified business income deduction is the smaller of 20% × $80,935.23 (profit minus half the SE tax, the health premiums and the retirement contribution) = $16,187.05 and 20% × $64,835.23 = $12,967.05, so taxable income is $51,868.18 and federal tax $6,123.00. Take-home: $100,000 − $14,129.55 − $6,123.00 − $6,000 − $6,000 = $67,747.45.
- 4 Result: the calculator shows a $752.55 W-2 advantage and a break-even 1099 rate of about $101,082 a year ($48.60 an hour vs $48.08). That covers taxes only: an employer's health subsidy, 401(k) match and paid leave widen the gap, so price them in as well.
Source: IRS — Small Business & Self-Employed · Last updated: September 2026
Frequently Asked Questions
How much more should I charge as a 1099 contractor vs W-2 salary?
What taxes do 1099 contractors pay that W-2 employees do not?
Can a 1099 contractor contribute to a retirement plan?
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