1099 vs W-2 Comparison Calculator
Comparing a W-2 offer to a freelance contract? Or considering the leap from employee to 1099? See your real take-home on both paths — including the parts most calculators skip (employer benefits, self-paid benefits, full SE tax).
W-2 job
Your current job, or the offer you're comparing.
Health insurance, 401(k) match, life, dental, etc. Estimate.
1099 contract
What the freelance side would pay.
What you'd pay out-of-pocket for health, retirement match, etc.
1099 falls short by
The W-2 still wins (after tax + benefits). To match the W-2 effective comp on a 1099, your contract would need to be $130,026/yr.
W-2 path
- Salary
- $85,000
- − FICA (7.65%)
- −$6,503
- − Federal income tax
- −$10,045
- − State (5%)
- −$4,250
- Take-home
- $64,203
- + Employer benefits
- +$12,000
- Effective compensation
- $76,203
1099 path
- Contract revenue
- $110,000
- − Business expenses
- −$5,000
- Net profit
- $105,000
- − SE tax (15.3%)
- −$14,836
- − Federal income tax
- −$12,813
- − State (5%)
- −$5,250
- Take-home
- $72,101
- − Self-paid benefits
- −$8,000
- Effective compensation
- $64,101
Single-filer math, 2026 IRS figures. Doesn't model QBI, retirement contributions, additional Medicare tax, or unbillable hours.
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Why 1099 needs a higher gross to match W-2
Three structural reasons a 1099 contract has to pay more to match a W-2 salary, even before benefits:
- FICA doubles. On W-2, you pay 7.65% and your employer pays 7.65%. On 1099, you pay all 15.3% as self-employment tax. That's a hard ~7.65-percentage-point hit.
- No paid time off. A W-2 with 3 weeks vacation + sick days is paid for ~49 of 52 weeks. A 1099 contractor is paid only when working.
- No employer benefits. Health insurance, 401(k) match, life, dental, vision, FSA — all of those total $8k–$25k+ per year of value the employer was paying. On 1099 you self-fund or go without.
Rough rule: a $100k W-2 salary requires ~$130k–$160k of 1099 revenue to match the lifestyle, depending on benefits and state.
Where 1099 wins
- Deductions. Schedule C expenses (home office, software, mileage, education, retirement contributions) reduce taxable income in ways W-2 employees can't access.
- Retirement scale. Solo 401(k) lets you contribute up to $70k+/yr (2026) — far more than a typical W-2 401(k) match.
- Multiple clients. Income isn't capped at one employer's salary band.
- QBI deduction. The 20% qualified business income deduction (subject to phase-outs) can knock 4–6% off your federal tax bill — W-2 employees don't qualify on their wage income.
What this calculator skips
- QBI (the 20% pass-through deduction). For some 1099 workers this is significant; the model here is conservative without it.
- Retirement contributions (model both yourself by adjusting the "benefits" inputs).
- Additional Medicare Tax (+0.9% above $200k single / $250k MFJ).
- Stock-based comp, ESPP, RSUs — common in tech W-2 packages and a real value adjustment.
- Filing status — uses single-filer brackets. Joint filers should treat results as slightly conservative.