Is that 1099 offer actually better than your W-2 job?
This 1099 vs W-2 calculator settles it: a $30/hr contract gig is not the same as a $30/hr salaried job. Enter both and this shows what you really keep — after self-employment tax, lost benefits, and business costs — plus the 1099 rate you’d need to truly break even.
Option A
W-2 Job (employee)
$
$
Employer-paid health insurance + 401(k) match + any paid perks. ~$10k–$20k is typical for full-time.
Option B
1099 / Contractor
$
Hourly offer? Multiply by the hours you’d actually bill in a year.
$
Gas, gear, software, phone, supplies — the deductible cost of doing the work.
%
Rough federal + state income tax. Applied to both so the comparison is apples-to-apples.
Which keeps you more
The honest number
$0
W-2 Job
| Salary | $0 |
| – FICA (7.65%) | $0 |
| – Income tax | $0 |
| + Employer benefits | $0 |
| = Total value | $0 |
1099 / Contractor
| Gross pay | $0 |
| – Business expenses | $0 |
| – Self-employment tax (15.3%) | $0 |
| – Income tax | $0 |
| = Total value | $0 |
Why 1099 has to pay more: as a contractor you cover both halves of Social Security and Medicare (15.3% vs. the 7.65% a W-2 employee pays), you get no employer health insurance, 401(k) match, or paid time off, and you ride out the gaps between gigs yourself. A 1099 rate that merely matches a salary is a pay cut. The break-even number above is what it actually takes to come out even.
Dig into your numbers
Self-Employment Tax →Your exact 2026 SE tax on 1099 profit.
Freelance Hourly Rate →The rate to charge to hit a take-home target.
Quarterly Tax Estimator →What to send the IRS each quarter as a 1099 worker.
Solo 401(k) vs. SEP-IRA →Retirement savings a 1099 job can shelter that a W-2 401(k) can’t.
ACA Health Subsidy Calculator →What Marketplace health insurance would really cost you as a 1099 worker.
All Calculators →Every GigWorkerTools tool in one place.
Educational estimate only — not tax or financial advice. Uses 2026 figures: W-2 FICA 7.65% (Social Security 6.2% capped at the $184,500 wage base + Medicare 1.45%); self-employment tax 15.3% on 92.35% of net profit, with half deductible. Income tax is a rough set-aside you enter and applies equally to both options; real results vary by state, filing status, deductions, credits, and the actual value of your benefits. Confirm your situation with a qualified CPA.