1099 vs W-2 Calculator 2026

Compare take-home pay as a 1099 contractor vs W-2 employee, including self-employment tax and benefits.

$
Filing status

W-2 Employee

$73,227

net income

Gross salary$100,000
Federal tax$13,170
State tax$5,953
Social Security$6,200
Medicare$1,450
Total tax$26,773

26.8% effective rate

+ $10,000 in employer benefits

1099 Contractor

$66,120

net income

Gross income$100,000
Business expenses($5,000)
SE tax (15.3%)$13,423
Federal tax$10,593
State tax$4,864
Total tax$28,880

28.9% effective rate

Difference: -$7,107 as 1099Break-even 1099 rate: $117,024

Based on 2026 tax rates. Does not account for QBI deduction, retirement contributions, or state-specific rules.

How it works

This calculator compares the same dollar amount as W-2 salary versus 1099 contractor income, showing the tax implications of each.

W-2 Employee: Federal income tax + state income tax + employee FICA (6.2% SS + 1.45% Medicare). Your employer pays the other half of FICA and may provide benefits.

1099 Contractor: Federal income tax + state income tax + full self-employment tax (12.4% SS + 2.9% Medicare on 92.35% of net income). You can deduct business expenses and half of SE tax.

The break-even rate shows what a contractor must charge to match the W-2 employee's net income plus benefits value.

FAQ

How much more do contractors pay in taxes?

About 7.65% more in FICA (both halves), partially offset by the half-SE-tax deduction and business expenses.

What is the break-even 1099 rate?

Typically 25-40% more than the equivalent W-2 salary to match take-home after taxes and benefits.

What expenses can contractors deduct?

Home office, equipment, software, travel, health insurance, retirement contributions, and any ordinary business expense.

Does this include the QBI deduction?

No. The Qualified Business Income deduction (up to 20% of QBI) could further reduce contractor taxes. Consult a tax professional.

Should I be a contractor or employee?

Beyond taxes, consider job security, benefits (health insurance, retirement match, PTO), flexibility, career growth, and liability. Contracting offers higher potential earnings and flexibility but requires self-management of taxes, benefits, and retirement.

Related tools

Estimates based on 2026 tax rates. Does not include QBI deduction, local taxes, or state-specific rules. Consult a tax professional for advice.