2026 tax year
W-2 vs 1099 calculator
A 1099 offer has to clear a higher number just to match a salary, this shows how much higher.
A 1099 contract at a bigger headline number is not automatically the better deal. As a contractor you pay both halves of Social Security and Medicare (self-employment tax), buy your own health insurance, and get no paid time off or 401(k) match. This weighs a W-2 salary against a 1099 rate on take-home, and tells you the 1099 gross that would actually break even.
The W-2 offer
The 1099 offer
Enter both offers and press Compare.
Worked example, a $85,000 salary vs a $95,000 contract
The W-2 offer is $85,000 plus $8,000 of employer-paid health insurance, a 4% 401(k) match and three weeks of paid leave. The 1099 offer is $95,000 gross, against which the contractor has $8,000 of business deductions and $6,000 of health insurance to buy. In Ohio, single:
| Figure | Amount |
|---|---|
| W-2 take-home | $67,006 |
| 1099 take-home | $69,973 |
| Difference | $2,966 for the 1099 |
| True value of the W-2 with benefits | $107,806 |
| 1099 gross needed to match the W-2 take-home | $91,029 |
The $95,000 contract edges the salary on take-home here, by $2,966. But once the employer-paid health insurance, match and paid leave are counted, the W-2 is worth $107,806 in total. And a 1099 offer only has to reach $91,029 gross to tie the salary on take-home alone, before any of those benefits. Below that, the salary wins outright.
Questions
How much more should a 1099 rate be than a W-2 salary?
Enough to cover the employer's half of FICA (7.65%), the benefits you now buy yourself, and the paid time off you no longer get, often 25 to 50% more, depending on the benefits involved. This calculator computes the exact break-even for your numbers rather than a rule of thumb.
What is self-employment tax?
The 15.3% a 1099 worker pays for Social Security and Medicare, both the employee and employer halves, because you are both. A W-2 employee pays only the 7.65% employee half; the employer covers the rest invisibly. Half of self-employment tax is deductible, which the calculation accounts for.
Does the 1099 side get any tax advantages?
Yes, business deductions for real expenses, the qualified business income (QBI) deduction on pass-through profit, and larger retirement contributions through a solo 401(k) or SEP. The calculator includes deductions, QBI and a solo 401(k) input, which is why a 1099 offer can pull ahead on take-home.
What's the catch with a higher 1099 take-home?
Volatility and no safety net. Contractors have no unemployment insurance, no employer disability or life cover, no paid leave, and income that can stop without notice. A few thousand dollars more in take-home may not offset the loss of a benefits package and stability, which is why the "true value" row matters as much as take-home.
Do I pay quarterly taxes as a 1099 worker?
Usually yes. No one withholds tax from a 1099 payment, so you send estimated payments four times a year. The quarterly tax calculator sizes each one.
Related tools
- 1099 tax calculator full self-employment tax by state
- Paycheck calculator W-2 take-home in detail
- Quarterly tax calculator estimated payments for 1099 income
Estimate for the 2026 tax year, single primary earner, standard deduction. Benefit values depend on the figures you enter. Not tax or career advice.