1099 vs W2 Calculator

Compare employer cost and worker take-home — and find the 1099 rate that matches a W2 offer.

Payroll taxes + benefits on W2

Worker's effective rate

Worker's effective rate

Employer cost (per year)

$98,176

W2 fully burdened

$104,000

1099 cost

W2 is cheaper for the employer by $5,824/yr.

Worker take-home (per year)

$62,691

W2 take-home

$72,874

1099 take-home

1099 nets the worker $10,183/yr more. A 1099 rate of about $43.01/hr matches this W2 offer's take-home.

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Estimates only, using editable 2025 US defaults. Tax and insurance rates vary by employer, classification, and locality — verify with a licensed accountant before relying on these figures.

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Deciding between a 1099 contractor and a W2 employee comes down to two different questions: what does each option cost the employer, and what does the worker actually take home? This 1099 vs W2 calculator answers both at once. It accounts for the full 15.3% self-employment tax that 1099 workers pay, the 7.65% employee share for W2 workers, employer payroll burden, and federal and state income tax.

The most useful output is the break-even rate: the 1099 hourly rate that nets the same annual take-home as a given W2 wage. Use it to convert an offer in either direction or to negotiate a fair contract rate.

1099 vs W2 by State

State income tax changes the take-home math. Open a state-specific calculator with local defaults pre-filled:

AlaskaCaliforniaFloridaGeorgiaIllinoisNevadaNew HampshireNew YorkPennsylvaniaSouth DakotaTennesseeTexas

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Frequently Asked Questions

How does the 1099 vs W2 calculator work?
Enter the W2 hourly rate and the 1099 hourly rate, plus the worker's effective federal and state income-tax rates. The calculator shows the employer's cost for each option and the worker's annual take-home for each, then computes the 1099 rate that would match the W2 take-home.
Why does a 1099 contractor need a higher rate than a W2 employee?
A 1099 contractor pays the full 15.3% self-employment tax (both halves of Social Security and Medicare) and gets no employer benefits, PTO, or unemployment coverage. To net the same take-home, a 1099 rate usually has to be meaningfully higher than the equivalent W2 wage.
Is 1099 or W2 cheaper for the employer?
It depends on the rates. A W2 employee carries employer payroll taxes and benefits (often 15-25% on top of wages), while a 1099 contractor is billed at their rate with no employer payroll tax. The calculator shows the annual cost of each so you can compare directly.
Does this work as a 1099 to W2 calculator too?
Yes. The break-even output tells you the W2-equivalent of a 1099 rate (and vice versa), so you can convert an offer in either direction.
Are these numbers tax advice?
No. They are planning estimates using editable 2025 US defaults. Effective tax rates depend on income, filing status, deductions, and locality. Confirm with a licensed accountant.