W-2 vs 1099 calculator
Offered the same work two ways — a W-2 salary and a 1099 contract rate? The two are taxed differently and come with different benefits, so the bigger number is not the whole story. Enter both offers to see what each one leaves you after taxes and benefits, side by side.
Only the pay is required — the benefit fields are optional and make the comparison more accurate.
| Per year | W-2 | 1099 |
|---|---|---|
| Gross pay | – | – |
| Social Security & Medicare | – | – |
| Federal income tax | – | – |
| State income tax | – | – |
| Health premium you pay | – | – |
| Take-home pay | – | – |
| Employer 401(k) match | – | — |
| Paid time off given up | — | – |
| (Total tax) | – | – |
| Total value | – | – |
How to use this calculator
Enter each offer the way it was actually quoted, and the tool converts both to a yearly figure before comparing them:
- Pay basis — pick how you're paid (hourly, weekly, per visit, salary, and so on), then enter the hours or weeks so an hourly rate and a salary become comparable.
- Filing status and state — these set your federal brackets and an approximate state income tax.
- Offered pay — the W-2 number in one column, the 1099 number in the other. Pay is the only thing required; the rest make the comparison more accurate.
- Benefits — your monthly health premium, an employer 401(k) match, and paid time off on the W-2 side; the health insurance you'd buy on the 1099 side.
- Business expenses — what you'd spend to do the 1099 work, so it's taxed on profit, not on gross pay.
The result shows each offer's take-home and total value side by side, the tax on each, and — for the 1099 — how much to set aside for taxes out of each paycheck.
What the estimate includes — and what it leaves out
On the tax side, the calculator applies 2026 federal rules: the 7.65% employee share of Social Security and Medicare on the W-2 side versus the full 15.3% self-employment tax on the 1099 side, federal income tax after the standard deduction, the 0.9% Additional Medicare Tax above the IRS thresholds, and — on the 1099 side — the 20% QBI deduction and the self-employed health-insurance deduction. The Social Security portion of each stops at the annual wage base — $184,500 in 2026 — while the Medicare portion applies to all earnings. State income tax is approximated per state.
It does not model every local tax, credit, or deduction, and it is not filing-grade. Think of it as a fast, honest way to see which offer is actually bigger once tax and benefits are counted — then confirm the specifics with a tax professional before you sign. Full detail is on the Methodology & Sources page.
W-2 vs 1099: the full explanation
The IRS draws the line based on control. You are generally an employee when the business has the right to direct and control what work you do and how you do it, and an independent contractor when you offer your services independently and control how the work gets done. Your status is set by the actual working relationship, not by a job title or a signed agreement.
Taxes and withholding
As a W-2 employee, your employer withholds income tax from your paycheck along with your share of Social Security and Medicare — 7.65% of your pay (6.2% for Social Security, on earnings up to $184,500 in 2026, plus 1.45% for Medicare on all of it) — and pays a matching share on top of your wages.
As a 1099 independent contractor, nothing is withheld. Because no employer covers the other half, you pay both halves yourself — the 15.3% self-employment tax (12.4% Social Security plus 2.9% Medicare) — on top of income tax. Since no one withholds for you, you set money aside from your pay and send it to the IRS yourself through quarterly estimated tax payments (Form 1040-ES).
As a 1099 worker you are taxed on your profit, not your gross pay — the cost of doing the job (supplies, licensing, liability insurance, work gear such as boots and safety equipment, mileage, and meals while traveling for work) comes off first. On top of that, self-employment income qualifies for the 20% qualified business income (QBI) deduction and the self-employed health-insurance deduction that wage income does not — this calculator applies these to the 1099 side. Those deductions are where a contractor recovers part of the extra self-employment tax.
Benefits and protections
Employees are covered by the federal Fair Labor Standards Act, which sets a minimum wage and overtime pay; independent contractors are in business for themselves and are not covered by it. Employee status also generally comes with unemployment insurance and workers' compensation, and a W-2 job often comes with employer-shared benefits — for health insurance the employer usually pays most of the premium and your share comes out of your paycheck, often pre-tax. A 1099 contractor generally receives none of these and buys or funds them independently.
What it means for comparing two offers
A 1099 role often quotes a higher headline number than a W-2 role — but that number has nothing taken out. From it you cover the full self-employment tax, your income tax, and any benefits you would otherwise get through an employer, so the take-home is not the number on the offer. The calculator above works out each side after tax and benefits from your own figures.
A 1099 offer for the same job can be misclassification
Whether you are a W-2 employee or a 1099 contractor is decided by how you actually work, not by what you sign. If the company sets your schedule, provides your tools or equipment, and directs how you do the work, you are likely an employee under IRS and U.S. Department of Labor tests — even if you agreed to a 1099. A misclassified worker loses overtime, unemployment, and workers' compensation coverage. To correct it, a worker can file IRS Form SS-8 for an official determination and Form 8919 to pay only the employee half of Social Security and Medicare.
Driving a truck? Per-mile and percentage pay are handled on the Trucker Pay calculator instead.