Convert 1099 to W2 Calculator: Find Your Equivalent Salary in 2026

Why Converting 1099 Income to W2 Salary Is Harder Than You Think

You have been contracting for two years, pulling in $120,000 in 1099 income. A company offers you a full-time position, but you have no idea what salary to ask for. If you just match $120,000 as your salary demand, you will almost certainly be undervaluing yourself.

The problem is that 1099 income and W2 income live in different tax universes. As a contractor, you pay both halves of self-employment tax, cover 100 percent of your health insurance, receive zero paid time off, and fund your own retirement. A W2 job changes every one of those line items. A proper convert 1099 to W2 calculator accounts for all of it and gives you the single number that truly matters: your equivalent W2 salary.

The 5 Cost Categories That Change Everything

When you convert 1099 income to a W2 equivalent, five categories account for nearly the entire difference. Here is what shifts when you move from contract to salaried work:

Cost Category	1099 Contractor	W2 Employee
Self-Employment Tax	Pay both halves: 15.3% on net SE income (after the 92.35% adjustment)	Employer pays 7.65%; you pay 7.65%
Health Insurance	Full premium out of pocket ($400–$900/month for individual plans)	Employer subsidizes 50–85% of premiums
Retirement Matching	No employer match; you fund a Solo 401(k) or SEP-IRA yourself	Typical 3–6% employer 401(k) match
Paid Time Off	No work = no pay; every vacation day is unpaid	2–4 weeks paid vacation + holidays + sick days
Business Expenses	Equipment, software, home office, mileage—all deductible	Not deductible on Schedule A (misc deduction suspended)

The 1099 to W2 Conversion Formula

To find your equivalent W2 salary, work backward from your current 1099 income:

• Step 1: Take your 1099 net income (after business expenses). Example: $120,000
• Step 2: Subtract the self-employment tax you pay. On $120K net: “SE base” = $120,000 × 0.9235 = $110,820. SE tax = $110,820 × 15.3% = $16,955. After SE tax: $120,000 - $16,955 = $103,045
• Step 3: Subtract the value of employer-provided benefits you do not get as a 1099 contractor: health insurance subsidy ($6,000–$12,000), 401(k) match ($3,600–$7,200), PTO value ($4,600–$9,200)
• Step 4: What remains is your approximate W2 equivalent salary. $103,045 - $15,000 (midpoint benefits) = $88,045 W2 equivalent

Real Example: $120,000 Contractor to W2

As a 1099 contractor earning $120,000 net:

• You pay ~$16,955 in self-employment tax (employer pays this for you as W2)
• You spend ~$9,000 on health insurance (employer pays ~70% as W2)
• You get $0 in 401(k) match (employer matches ~$5,400 as W2)
• You get 0 weeks PTO (W2 offers ~3 weeks = ~$6,923 in paid time)

Total benefits value lost as 1099: ~$32,000

Equivalent W2 salary: ~$88,000

For a side-by-side comparison that goes both ways, calculatemyw2.com offers a detailed W2 paycheck breakdown.