1099 vs W2 Calculator

Compare contractor vs employee take-home pay. Factor in self-employment tax, deductions, retirement, and benefits.

Compensation

1099 Deductions & Expenses

Equipment, software, mileage, home office
SEP IRA / Solo 401(k)
Self-employed health premiums
401k match + health + PTO value
Total Annual Compensation
$100,573.00
W-2 wins by $34,387.83

💼 W-2 Employee

Gross Pay$120,000.00
Federal Tax−$18,047.00
State Tax−$7,200.00
FICA (SS + Medicare)−$9,180.00
Take-Home$85,573.00
+ Benefits+$15,000.00
Total Compensation$100,573.00

📊 1099 Contractor

Gross Revenue$120,000.00
Deductions−$21,000.00
Self-Employment Tax−$15,147.00
Federal Tax−$11,727.83
State Tax−$5,940.00
Take-Home$66,185.17
Total Compensation$66,185.17
Break-Even: To match W-2 total compensation, your 1099 rate needs to be at least $168,277.38 (40% more).

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FAQs

What is the self-employment tax rate?

15.3% total: 12.4% Social Security (up to wage base of $176,100 in 2025) + 2.9% Medicare. You can deduct half of this from your income taxes.

How much more should a 1099 rate be?

Generally 25-35% more than equivalent W-2 salary to account for self-employment tax, no benefits, no PTO, and added risk. Use this calculator to find your exact break-even.

What deductions can 1099 contractors take?

Business expenses (equipment, software, home office, mileage), health insurance premiums, retirement contributions (SEP IRA, Solo 401k), and half of self-employment tax.

What benefits do W-2 employees get?

Employer-paid half of FICA (7.65%), health insurance subsidies, 401(k) matching, paid time off, workers comp, unemployment insurance, and job protections. These add 20-35% to base salary.