1099 vs W-2 Take-Home Calculator
A 1099 contract usually needs to pay more than a W-2 salary to match, because you cover the employer's payroll tax and your own benefits. Estimate the gap.
Why the comparison isn't apples-to-apples
A W-2 employer pays half your Social Security/Medicare (7.65%) and often provides health insurance, retirement match, and paid leave. As a 1099 contractor you pay the full 15.3% self-employment tax and buy those benefits yourself. This tool subtracts self-employment tax and the benefits you'd self-fund from the 1099 side, and employee FICA from the W-2 side, using a flat income-tax set-aside for both. It's a planning estimate — not tax advice.
Frequently asked questions
How much more should a 1099 rate be?
As a rule of thumb, a 1099 rate often needs to be ~25–40% higher than a W-2 salary to break even after taxes and benefits.