1099 vs. W-2 calculator
Compare equal headline pay as an employee and contractor, then see the contractor revenue needed to match the W-2 cash plus benefits you value.
| Per year | W-2 | 1099 |
|---|---|---|
| Gross pay / revenue | $75,000.00 | $75,000.00 |
| Business expenses | — | −$5,000.00 |
| Federal income tax | −$7,670.00 | −$5,626.56 |
| Social Security and Medicare | −$5,737.50 | −$9,890.69 |
| Cash after federal tax | $61,592.50 | $54,482.75 |
| Employer benefits value | $8,000.00 | — |
| Cash + entered benefits | $69,592.50 | $54,482.75 |
Why the same number is not the same pay
A W-2 employee pays the employee half of Social Security and Medicare while the employer pays the other half. A self-employed worker generally pays both halves through self-employment tax, but can deduct the employer-equivalent half when figuring adjusted gross income. Contractors also pay their own business expenses and replace benefits and paid time off.
What to put in benefits value
Use only benefits that have real value to you: the employer-paid share of health coverage, retirement match, life or disability coverage, and other employer contributions. Paid time off is not added separately here; if contractor revenue assumes unpaid days, lower the expected 1099 revenue or treat that gap as another cost.
This is a federal-only comparison. It excludes state tax, QBI, tax credits and insurance-market differences, and it does not decide whether a worker is legally an employee or independent contractor.
Sources
- IRS Form 1040-ES (2026) — 92.35% net-earnings factor, 2.9% Medicare and 12.4% Social Security calculation, half-tax deduction, tax schedules, safe-harbor rules and payment dates
- IRS — Self-employment tax — who pays SE tax, Additional Medicare Tax filing-status thresholds and the employer-equivalent deduction
- IRS — About Schedule SE — Schedule SE is used to figure tax due on net earnings from self-employment
Questions
How much more should a 1099 contractor charge?
There is no universal percentage. The calculator solves for revenue that matches after-federal-tax W-2 cash plus the benefits and business expenses you enter.
Does a 1099 worker pay twice the tax?
No. The Social Security and Medicare component is higher because the contractor generally covers both employee and employer shares, but federal income tax still depends on taxable income and filing status.
Does this decide whether I can be paid on a 1099?
No. Worker classification depends on the actual working relationship and applicable law, not which result looks better.