1099 vs W-2 Calculator (2026)

Enter a salary offer and a contract offer and see what each leaves after tax, benefits and the costs a contractor carries — and the contract pay that would actually match the salary.

Federal 2026 data checked against the official publications, last on 2026-09-05 Runs in your browser — nothing you type is sent anywhere, not even when you reload or share the link No sign-up Methodology and data status

Why a 1099 rate has to be higher than a salary

The same gross pay is worth less as a contractor than as an employee, for four reasons the calculator prices and a few it cannot.

1. Both halves of Social Security and Medicare. An employee pays 6.2% for Social Security on wages up to $184,500 and 1.45% for Medicare, and the employer pays the same again. A contractor pays both halves as self-employment tax — 15.3% on 92.35% of net profit — and deducts half of it from income. On $100,000 that is roughly $14,130 of self-employment tax against $7,650 of employee payroll tax.
2. Benefits the employer no longer pays. Health insurance is the large one — employer contributions to family coverage commonly run into five figures — followed by a retirement match, and paid leave, which a contractor funds by not billing. The calculator counts what you enter for employer-paid benefits and match as money the W-2 offer delivers, and the premiums you would buy yourself as a cost of the 1099 offer.
3. Expenses of the work. A laptop, software, professional liability insurance, a coworking desk. They are deductible on Schedule C, which softens them, but they are still paid.
4. Two things that go the other way. The 20% qualified business income deduction applies to contract profit and not to wages, and the contractor's health premiums and retirement contributions are deductible in ways an employee's often are not. The calculator applies all of these.

Not in the arithmetic: unemployment insurance (a contractor has none), workers' compensation and state disability cover, employer-paid life or disability insurance, the cost of collecting invoices, and the value of an employer's contribution to a health savings account. Where they matter, add an estimate to the employer-paid benefits figure.

Reading the result

"Kept after tax" is the same measure on both sides: cash left after every tax and every cost you entered, plus the money that lands in a retirement account (the employer's match on the W-2 side; your own contribution on the 1099 side, which is not treated as lost). "1099 pay to match the W-2" is the contract pay at which the two figures are equal, found by solving the same computation in reverse; the percentage in the note is the premium over the salary that the contract has to carry. The hourly figures divide by the hours you enter — put in the hours you expect to bill, not the hours you expect to work, if the two differ.

A rule of thumb quoted in most hiring conversations is that a contract rate should be 20% to 30% above the equivalent salary. The calculator shows where that comes from and when it is wrong: at low incomes the employer's share of payroll tax dominates and 20% is about right; with expensive family health coverage or a generous match the gap is wider; with high income the Social Security wage base caps the payroll-tax difference and the QBI deduction narrows it further.

Who decides the classification

Whether a worker is an employee or a contractor is not a choice the two sides make by agreement. The IRS applies a common-law test — behavioral control, financial control and the relationship of the parties — and a business that treats an employee as a contractor is liable for the employment taxes it should have withheld. Several states use a stricter test (California's ABC test under AB 5 is the best known). The calculator assumes the classification is correct and asks only what each is worth.

What the 1099 side has to do

No tax is withheld from contract pay, so the contractor makes four estimated payments a year and keeps records of expenses. The quarterly calculator sets the payments; the guides on the 2026 due dates, the health insurance deduction and SEP-IRA vs solo 401(k) cover the three items the comparison depends on most. A contractor with a spouse on a W-2 can also cover the contract tax through the spouse's withholding, as described in the withholding guide.

Common questions