1099 vs W2 Calculator — What Rate Makes Contracting Worth It?
Compare a W-2 salary against a 1099 contract rate: self-employment tax, benefits, paid time off, and the hourly rate you actually need to break even. Free.
A $100K salary and a $100K contract are not the same money. As a 1099 contractor you pay both halves of FICA, buy your own benefits, and get no paid time off — the calculator converts all of that into the contract rate that actually matches the salary.
Enter the salary offer (or your current one) with benefits, and see the equivalent 1099 hourly or annual rate, plus what you keep after self-employment tax on each side.
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W-2 vs 1099 Decision Tool
Compare total compensation between a W-2 job and 1099 contract — including benefits, taxes, and take-home.
Tax brackets, standard deductions, and SS wage base are based on IRS inflation-adjusted figures for the 2026 tax year (Rev. Proc. 2025-32) and the SSA 2026 wage base ($184,500). State income tax rates are simplified (flat/representative rates). This calculator is for estimation only — consult a tax professional for filing.
How W-2 vs 1099 comparison works — illustrated
The headline number of a job offer hides the real difference. On a W-2, your employer pays half of FICA (7.65%) and typically covers health insurance, a 401(k) match, and paid time off — value you never see in your paycheck. As a 1099 contractor you pay the full 15.3% self-employment tax yourself, buy your own benefits, and get no paid leave, but you can deduct business expenses and the 20% QBI deduction. This tool values every benefit dollar on each side and solves for the 1099 income that makes take-home equal.
The W-2 column keeps employer FICA, health insurance, the 401(k) match, and paid time off. The 1099 column must cover SE tax, health insurance, and unpaid time off out of pocket — which is why contract rates typically need to run 20–30% higher.
Sofia, a marketing manager in Chicago, compares a W-2 offer of $90,000 salary + $5,000 bonus with $12,000 employer health insurance, a $4,500 401(k) match, and 15 paid vacation days against a 1099 contract.
- W-2 total value:$95,000 gross + $16,500 benefits − employee FICA (7.65%) − income tax
- 1099 take-home:gross − 15.3% SE tax (on 92.35%) − income tax − $12,000 health insurance, with no paid leave
- Find the break-even:the tool solves the 1099 gross where take-home equals the W-2 total value
- Decision:if the contract rate is below the break-even, the W-2 offer wins on total value
About this 1099 vs W2 calculator
This page covers w2 to 1099 conversion rate, contractor rate vs salary calculator, 1099 pay bump calculator, should i switch to 1099 — all the same underlying task as 1099 vs W2 calculator. The tool above is FreeToolHub's w2 vs 1099 embedded in full: every feature works right here, and nothing you process is uploaded to any server.
Frequently asked questions
How much higher should a 1099 rate be than W-2 salary?
A common rule is 20–30% above the equivalent salaried rate: roughly 7.65% covers the extra FICA half, plus 10–15% for benefits (health insurance, retirement match) and unpaid time off. Your actual number depends on the benefits package being replaced — the calculator computes it exactly.
Do 1099 workers pay more taxes?
Yes on the payroll side: you pay both employer and employee halves of Social Security and Medicare (15.3% total, vs 7.65% as W-2), though the employer half is deductible. Income tax rates are identical. The tradeoff is deductions: contractors can deduct business expenses and retirement contributions that employees cannot.