1099 vs W-2 Calculator
Compare a W-2 employee offer against an equivalent 1099 contractor / freelance role apples-to-apples, including SE tax, own health insurance, and unbillable hours.
FINANCECompare a W-2 employee offer against an equivalent 1099 contractor role apples-to-apples. Accounts for self-employment tax, health insurance you must buy yourself, retirement contributions, and unbillable hours.
Common rule of thumb: a 1099 rate should be 25-40% higher than equivalent W-2 hourly to break even after SE tax, benefits, and unbillable time. Full-time billable is at most ~1,800 hrs/yr for solo freelancers (rest is sales, admin, PTO). 1099 trade-offs: higher gross, no employer match, must self-fund retirement and health insurance, quarterly tax cash-flow friction.
1099 vs W-2 Calculator
Compare a W-2 employee offer against an equivalent 1099 contractor / freelance role. Apples-to-apples means accounting for self-employment tax, health insurance you must buy yourself, retirement contributions, and unbillable hours.
W-2 Employee Offer
1099 Contractor Offer
Common rule of thumb: a 1099 rate should be 25-40% higher than the equivalent W-2 hourly to break even after SE tax, benefits, and unbillable time. The federal income tax brackets are the same either way - this calc focuses on FICA / benefits / expenses. Does not include state unemployment insurance differences, workers comp, or quarterly tax cash-flow friction.