1099 vs W-2 Calculator
Compare your federal take-home pay as a W-2 employee versus a 1099 contractor using 2026 rates, and see the rate premium a contract needs to match a salary. 100% in your browser.
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Employee vs Contractor (2026)
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Your Income
Annual gross salary before tax.
What the contract pays you before expenses.
Deductible costs only the contractor can claim.
Federal After-Tax Compare
As a W-2 employee
Federal income tax
$13170.00
FICA (7.65%)
$7650.00
Net after federal tax
$79180.00
As a 1099 contractor
Self-employment tax
$14836.03
Federal income tax
$12638.04
Net after federal tax
$77525.94
The contract nets $1654.06 less than the salary. You would need roughly 2.1% more on the contract to match it after federal tax.
This calculator provides estimation only. All results are for reference purposes only and do not constitute professional tax, financial, or legal advice. Please consult a qualified professional for official financial decisions.
Compare the Real Tax Cost of 1099 vs W-2
The Same Income, Two Different Tax Systems
A W-2 employee pays income tax plus 7.65% payroll tax, with an employer silently adding another 7.65% on top. A 1099 contractor pays the full 15.3% self-employment tax themselves but can deduct business expenses first—and half of their self-employment tax—before income tax applies. Because the rules differ so much, an annual figure alone cannot tell you which path pays better.
What This Comparison Actually Models
Enter the salary offer and the contract's gross pay, plus the business expenses only the contractor can claim. The calculator applies the 2026 standard deductions and brackets to both sides, adds the employee's FICA on wages and the contractor's self-employment tax on profit, and reports the net after federal tax for each—plus the premium the contract would need to match the job.
What It Leaves Out (on Purpose)
State income tax, health insurance, employer retirement matching, paid time off and legal protections are all real differences between the two arrangements, but they depend on your location and benefits package. Model the federal gap here, then add your state rate and the dollar value of benefits to finish the comparison.
How to Use This Calculator
Set your filing status, enter a realistic salary offer and the contract rate you are considering, and add the expenses you would genuinely deduct as a contractor. Adjust the contract gross until the two nets align—the gross where they match is the contract rate you should negotiate for.
Frequently Asked Questions
Answers to common questions about using this calculator.