W-2 vs 1099 Calculator

2026 rules

Compare a salaried job and a contract for the same work after tax and benefits.

Your numbers

W-2 salary offer

Value of W-2 benefits (health premium paid, 401(k) match, PTO)

1099 contract pay for the same work (yearly)

Expenses you'd cover as a contractor

Filing status

Result

Better deal (federal taxes)W-2 job

W-2: take-home plus benefits$87,145
income tax and employee FICA-$17,855
1099: take-home after SE and income tax$82,501
self-employment and income tax-$24,499
Difference$4,644
1099 pay needed to match the W-2 offer$116,680
That is the salary plus29.6%

How it works

As an employee you pay 7.65% FICA and your employer pays the other 7.65%. As a contractor you pay all 15.3% yourself, though half is deductible and the QBI deduction helps.

Benefits are part of the pay. Add the employer's share of health premiums, the 401(k) match and paid time off. The calculator finds the 1099 amount that leaves you with the same money.

2026 figures: IRS Rev. Proc. 2025-32 (2026 inflation adjustments); IRS Notice 2025-67 (2026 retirement plan limits); SSA 2026 COLA fact sheet; IRS Notice 2026-10 and Announcement 2026-11 (mileage).

Questions

How much more should a contract pay?

Usually 20% to 40% above the salary, depending on benefits, unpaid time between contracts and business costs.

Does state tax change the answer?

Rarely by much, since both are taxed as income. A few cities tax self-employment differently from wages.