1099 vs W-2 Calculator 2026
Updated for the 2026 tax year · Last updated June 13, 2026
W-2 take-home advantage at the same gross
$4,925
W-2 $79,180 vs 1099 $74,255 — before business expenses
| W-2: FICA (employee half) | −$7,650 |
| W-2: federal income tax | −$13,170 |
| W-2 take-home | $79,180 |
| 1099: self-employment tax | −$14,130 |
| 1099: federal income tax | −$11,616 |
| 1099 take-home | $74,255 |
A 1099 contractor pays both halves of FICA (self-employment tax) but deducts half and can write off business expenses — so contractors usually need a higher rate to match W-2 take-home. This ignores expenses, benefits, and QBI deduction. Federal only.
About this calculator
Contractors (1099) pay both halves of FICA as self-employment tax, while employees (W-2) split it with their employer. This calculator compares take-home pay at the same gross so you can see how much more a contract rate needs to be to match a salary.
FAQ
Why do 1099 contractors take home less at the same pay?
They pay the full 15.3% self-employment tax (both FICA halves) instead of just the 7.65% employee share, though they deduct half and can write off business expenses.
How much more should a contract rate be?
A common rule is 25–30% above an equivalent salary to cover the extra self-employment tax plus lost benefits like health insurance and employer retirement match.
Does this account for business expenses?
No. Real contractors can deduct business expenses and may qualify for the QBI deduction, which can narrow or close the gap shown here.
Related calculators
See everything on the retirement & tax hub.
2026 federal figures from IRS Rev. Proc. 2025-32 and Notice 2025-67; SSA wage base. Estimates for guidance only, not tax advice.