1099 vs W-2 Pay Calculator
Compare your real take-home pay as a contractor vs an employee — and see exactly what you'd need to invoice as a 1099 to match a salaried offer.
As a W-2 employee
Earning $0 salary
Gross pay
$0
Payroll tax (FICA)
7.65% — employer pays the other half
−$0
Federal income tax
−$0
Take-home
$0
As a 1099 contractor
Invoicing $0
Gross invoiced
$0
Self-employment tax
15.3% — you cover both halves
−$0
Federal income tax
After ½ SE + QBI deductions
−$0
Take-home
$0
Going 1099? Your expenses are your biggest tax break
The contractor side wins on deductions — but only for expenses you actually track. ReceiptSync scans every receipt and files it under the right Schedule C category, so you capture every write-off.
1099 vs W-2: what actually changes your paycheck
The headline difference is payroll tax. As a W-2 employee you pay 7.65% toward Social Security and Medicare and your employer pays a matching 7.65% behind the scenes. As a 1099 contractor you're both sides of that deal, so you owe the full 15.3% as self-employment tax — the single biggest reason contractors need to charge more.
It's not all downside. Contractors deduct half their SE tax, can claim the 20% QBI deduction, and — crucially — write off business expenses that employees can't. That's why the calculator often shows a lower income tax on the 1099 side even though the total tax is higher. The more you track, the more that gap closes. See our 1099 quarterly tax estimator and the best expense trackers for 1099 contractors.
When you weigh a contract offer against a salary, don't compare gross to gross. Compare take-home to take-home, then add what benefits are worth to you. The "equivalent rate" above is the floor — most contractors aim well above it.
This calculator is general information, not tax advice. Verify current figures and your situation with the IRS or a qualified tax professional.
Frequently asked questions
Why does a 1099 contractor pay more tax than a W-2 employee?
A W-2 employee pays 7.65% in payroll tax (Social Security + Medicare) and the employer quietly pays the matching 7.65%. A 1099 contractor is both worker and employer, so they pay the full 15.3% themselves as self-employment tax. You do get to deduct half of it, but it's still the main reason contractors owe more on the same gross pay.
How much more should I charge as a 1099 contractor?
At minimum, enough to cover the extra ~7.65% employer-side payroll tax — that's the 'equivalent rate' this calculator shows. But most contractors aim higher (often 25–50% above an equivalent salary) to also cover health insurance, retirement, paid time off, and unpaid gaps between contracts that an employer would otherwise provide.
Do 1099 contractors get any tax breaks employees don't?
Yes — contractors can deduct business expenses and usually qualify for the 20% Qualified Business Income (QBI) deduction, plus the deduction for half their self-employment tax. This tool includes a simplified QBI deduction, which is why the contractor's income tax comes out lower than the employee's on the same gross.
Is 1099 or W-2 better?
It depends. W-2 means less tax, benefits, and simplicity. 1099 means higher gross pay potential, big deduction opportunities, and flexibility — but you handle your own taxes, benefits, and quarterly payments. Use the numbers above plus the value of benefits to compare a specific offer.
Is this calculator tax advice?
No — it's a free estimate for planning, based on 2025 federal figures and not including state taxes or every situation. Confirm specifics with the IRS or a tax professional.