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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A 1099 contractor and a W2 employee at the same hourly rate do not cost the same, and they do not take home the same. This 1099 vs W2 calculator answers both questions at once. It counts the full 15.3% self-employment tax a 1099 worker pays, the 7.65% employee share on W2 wages, the employer's 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. For the employer side of a salaried W2 hire, the employee cost calculator applies the federal and state wage bases to an annual salary.

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Frequently Asked Questions

How does the 1099 vs W2 calculator work?
Enter the W2 hourly rate, the 1099 hourly rate, and the worker's effective federal and state income tax rates. The calculator shows the employer's annual cost for each option, the worker's annual take-home for each, and 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 receives no employer benefits, PTO, or unemployment coverage. To net the same take-home, the 1099 rate has to be higher than the W2 wage, usually by 20% to 30% or more.
Is 1099 or W2 cheaper for the employer?
It depends on the rates. A W2 employee carries employer payroll taxes and benefits, often 15% to 25% on top of wages. A 1099 contractor is paid the contract rate with no employer payroll tax. The calculator shows the annual cost of each side by side.
Does this work as a 1099 to W2 calculator too?
Yes. The break-even output gives the W2-equivalent of a 1099 rate and the reverse, so an offer can be converted 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.