2026 tax year · US · Updated June 11, 2026

1099 vs W-2 Calculator

A 1099 offer that looks bigger than a salary can still net less once self-employment tax enters the picture. This calculator runs both offers through the same 2026 federal math, names the winner, and tells you the 1099 pay that actually matches your W-2 offer.

Your two offers

$
Annual gross salary as an employee.
$
Annual gross contract pay as an independent contractor.
$
Health premiums the employer pays, 401(k) match, etc. Counts toward the W-2 side.

Your 2026 take-home comparison

W-2 offer

Gross salary
$80,000
FICAThe 7.65% employee share; your employer pays the other half
$6,120
Federal income tax
$8,770
Take-home
$65,110

1099 offer

Gross pay
$95,000
Self-employment taxBoth halves of Social Security and Medicare (15.3% on 92.35% of pay)
$13,423
Federal income taxAfter deducting half of the self-employment tax
$10,593
Take-home
$70,983
Winner: the 1099 offerHow far the 1099 take-home beats W-2 take-home plus benefits
$5,873
1099 pay that matches this W-2 offer1.08x the salary
$86,023
The 1099 side pays both halves of Social Security and Medicare but gets half of the self-employment tax back as a deduction before income tax. Business expenses, retirement-plan room, and the QBI deduction can narrow the gap and are not modeled here.

How the comparison works

The structural difference between the two offers is payroll tax. On the W-2 side, your employer pays half of Social Security and Medicare, so only the 7.65% employee share of FICA comes out of your salary before federal income tax. On the 1099 side, you pay both halves yourself: 15.3% self-employment tax on 92.35% of your pay. The partial offset is that half of that SE tax is deductible, so your income tax is computed on a smaller base. The calculator applies your standard deduction and the 2026 federal brackets to both sides and shows take-home dollar for dollar.

The equivalent-pay outputanswers the negotiating question directly: it is the 1099 amount whose after-tax take-home equals your W-2 take-home plus the benefits value you entered. The multiplier next to it (for example 1.18x) is your personal version of the rough “multiply by 1.3” rule, computed exactly for the tax portion. If a contract offer comes in below that number, you are taking a pay cut even though the gross looks larger.

Some things are deliberately left out: state income tax, the QBI deduction, deductible business expenses, and the 0.9% Additional Medicare Tax above $200,000. Expenses and QBI generally favor the 1099 side, so treat the contractor take-home here as a conservative floor. If you are deciding what to bill rather than weighing two offers, the freelance rate calculator answers “what should I charge per hour” while this page answers “which offer nets more.” The SE tax calculator breaks the 15.3% down line by line.

These are estimates, not tax advice. Federal only; both sides exclude credits and itemized deductions, and the 1099 side assumes no business expenses.

Where these numbers come from

Both sides run on the same federal model: FICA or self-employment tax, then federal income tax after the standard deduction (and the half-SE-tax deduction on the 1099 side). Every figure is transcribed from these sources:

Constants last verified against these sources on June 11, 2026. Every value is also pinned by an automated test suite that fails if a rate in the calculator drifts from the figure we transcribed from the source.

Frequently asked questions

Why does the same gross pay net differently on 1099 vs W-2?
On a W-2, your employer pays half of the 15.3% Social Security and Medicare tax; only the 7.65% employee share comes out of your check. On a 1099, you pay both halves yourself as self-employment tax. That structural shift, plus the benefits an employer typically funds, is why a 1099 offer has to be meaningfully larger than a salary to net the same amount.
What does the famous 'multiply your salary by 1.3' rule really reflect?
It bundles two things: the extra employer-side payroll tax you take on as a contractor, and the benefits and paid time off you now have to fund yourself. The tax part is exact math, and this calculator computes it for your actual numbers instead of a rounded rule of thumb. The benefits part varies by job, so the calculator takes it as an input rather than guessing.
What counts as the value of W-2 benefits?
Anything the employer pays that you would have to buy yourself as a contractor: the employer's share of health, dental, and vision premiums, the 401(k) match, employer HSA contributions, and life or disability coverage. Paid time off belongs here too if the contract role pays only for hours worked. Add up the annual dollar value and enter the total.
Does the calculator include state income tax?
No, it is federal only. State income tax usually affects both offers similarly since most states tax wages and self-employment income at the same rates, but some states add entity fees or local business taxes on the 1099 side. Check your state's rules if the comparison is close.
What about the QBI deduction?
The qualified business income deduction can let contractors deduct up to 20% of qualified business income, which usually helps the 1099 side. It is not modeled here because it phases out and changes character with total taxable income, filing status, and the type of work. If you expect to qualify, the 1099 side will look somewhat better than this calculator shows.
Can I just choose whether to be a 1099 contractor or W-2 employee?
No. Worker classification is determined by the facts of the relationship, not by preference or even by what the contract says. The IRS looks at behavioral control, financial control, and the nature of the relationship. If a company controls how, when, and where you work, you are likely an employee regardless of what the paperwork calls you.
Do contractors have to pay quarterly estimated taxes?
Generally yes. No one withholds tax from 1099 pay, so the IRS expects four estimated payments a year once you expect to owe $1,000 or more. Missing them triggers an underpayment penalty that works like interest. Budgeting the quarterly amount is part of the real cost of going 1099.
Is the Additional Medicare Tax included?
No. The 0.9% Additional Medicare Tax applies to wages and self-employment income above $200,000 for single filers ($250,000 married filing jointly), and it hits both W-2 and 1099 income above those thresholds. Below them it does not affect the comparison at all; above them, both sides owe it.

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