1099 vs W2 Calculator: Which Pays More?
Compare your take-home pay as a 1099 contractor versus W2 employee. Factor in taxes, benefits, and deductions to see which option puts more money in your pocket.
Enter Your Information
Income & Expenses
Your total earnings before taxes
Deductible expenses: home office, equipment, etc.
Annual health insurance premiums you pay
Benefits & Retirement
401k, SEP IRA, or Solo 401k contributions
Health insurance, 401k match, PTO value, etc.
Typical W2 benefits are worth $5,000-$15,000/year including employer health insurance contribution, 401k match, and paid time off.
Maximize Your 1099 Deductions
The key to winning as a 1099 contractor is maximizing your business deductions. Use our free calculator to find all the write-offs you're eligible for.
Find All Your DeductionsFrequently Asked Questions
Why do 1099 workers pay more in taxes than W2 employees?
As a 1099 contractor, you pay both the employer AND employee portions of Social Security and Medicare taxes (15.3% total). W2 employees only pay 7.65% because their employer pays the other half. However, 1099 workers can deduct business expenses and half of the self-employment tax.
What rate should 1099 workers charge to match W2 salary?
As a general rule, your 1099 rate should be 25-40% higher than an equivalent W2 salary to account for self-employment taxes, health insurance, retirement matching, and other benefits you no longer receive. Our calculator helps you determine the exact amount.
Can 1099 workers come out ahead financially?
Yes, 1099 workers can often earn more net income through business deductions, tax strategies, and typically higher hourly rates. Those with significant deductible expenses (home office, vehicle, equipment) often pay lower effective tax rates than W2 employees.
What benefits do W2 employees get that 1099 workers don't?
W2 employees typically receive: employer-paid health insurance (often $5,000-$15,000/year value), 401k matching, paid time off, unemployment insurance, workers compensation, and employer-paid FICA taxes. These should be factored into any 1099 vs W2 comparison.