1099 vs W-2 Paycheck Comparator
Enter the offer amount to see what each path really leaves in your pocket after every tax.
Runs entirely in your browser — your numbers never leave this page.
How it works
The headline rate lies. A $120k 1099 offer and a $120k W-2 salary are not the same money:
- Payroll tax doubles on 1099: W-2 workers pay 7.65% FICA and the employer matches it. Contractors pay both halves — 15.3% — on 92.35% of net profit (Social Security portion caps at the $184,500 wage base).
- Half of SE tax is deductible, which softens the blow slightly against income tax.
- The hidden W-2 paycheck: the employer’s 7.65% FICA match is real compensation you never see — on $120k that’s over $9,000.
- Benefits are the tiebreaker: health insurance, PTO, 401(k) match and unemployment coverage routinely add 20–30% to W-2 value. Price them before comparing.
- Quarterly taxes: 1099 income has no withholding — you pay estimated tax four times a year or face penalties.
Frequently asked questions
How much more should a 1099 rate be than W-2?
Roughly 25–30% more. That covers the extra 7.65% payroll tax, self-funded health insurance, unpaid time off, and the risk of gaps between contracts.
What is self-employment tax in 2026?
15.3% (12.4% Social Security + 2.9% Medicare) on 92.35% of net earnings, up to the $184,500 Social Security wage base; 2.9% Medicare continues above it, plus 0.9% over $200k/$250k.
Is half of SE tax really deductible?
Yes — you deduct one-half of self-employment tax from income (not from SE tax itself) when computing federal income tax.
Do contractors get the standard deduction?
Yes — the $16,100/$32,200 standard deduction applies to 1099 income exactly as it does to W-2 wages.
What about the QBI deduction?
Eligible pass-through income may qualify for up to a 20% qualified business income deduction, which can significantly favor the 1099 side. It has income phase-outs this calculator doesn’t model.
Do I owe quarterly estimated taxes as a contractor?
Yes — the IRS expects four estimated payments (Apr/Jun/Sep/Jan). Underpay and you owe penalties even if you settle up at filing time.
Can a 1099 contractor deduct health insurance?
Yes — self-employed health insurance premiums are deductible above the line, a break W-2 workers paying with after-tax dollars don’t get.
Does business use of home help the 1099 math?
A qualifying home office lets you deduct a share of rent, utilities and insurance — or $5/sq ft up to 300 sq ft under the simplified method.
Are unemployment benefits available to contractors?
Generally no — 1099 workers don’t pay into unemployment insurance, so there’s no safety net between gigs. Price that risk in.
W-2 vs 1099 for retirement savings?
W-2 workers get 401(k)s (often with a match); contractors use a Solo 401(k) or SEP IRA — the Solo 401(k) allows much larger contributions, partly offsetting the missing match.