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US · Tax Year 2026
Contractor or employee · 2026

1099 vs W-2 Calculator

The same gross pay is not the same job. This compares take-home on both sides — including the employer's half of payroll tax, which most comparisons leave out.

Prepared for the 2026 tax year.

The rules for the 2026 tax year are published during 2025 and 2026 — the adjusted figures first, the explaining publications as the year goes on — and the return they govern is filed in 2027.

What the work pays before any tax. Both sides are compared on this same figure.
Only states whose rates are verified appear here.
Health insurance the employer pays, 401(k) match, paid leave — anything the job gives that a contract does not.

Your comparison

Tax year 2026
1099 — self-employment tax $0 15.3% on 92.35% of profit. You pay both halves. Full breakdown →
1099 — income tax $0 On profit less half the SECA tax and the standard deduction.
1099 — take-home $0
W-2 — take-home $0
W-2 — payroll tax withheld $0 7.65% of wages (6.2% up to $184,500, plus 1.45% Medicare). The employer pays the same again, separately.
W-2 — employer's hidden half $0 Real money, but it never appears in the employee's pay. This is why comparing take-home alone misleads.
Equivalent 1099 rate for the same total cost $0
Naive gap (take-home only) $0
True gap (total cost basis) $0

What comes next? This page compares the two ways of being paid. It does not work out what a 1099 year actually costs in tax. The Self-Employment Tax Calculator tells you to add up the SECA tax on your own profit, the deductible half, and the 0.9% that only bites above $200,000.

Weighing up an S-corp instead? The S-Corp vs LLC Tax Calculator shows what a reasonable salary does to the payroll tax on the same profit, and what it costs to run.

Been asked for a W-9, or not asked at all? The 1099 Withholding Calculator shows whether a 1099-NEC is required at the new $2,000 threshold, and what 24% backup withholding takes out when the payer has no TIN for you.

Where these figures come from

FICA rates
6.2% + 1.45% each side · IRS Pub. 15 (2026)
Wage base
$184,500 ·
SECA rate
15.3% on 92.35% · IRC §1401
Additional Medicare
0.9%, employee only, no employer match
Verified
2 October 2026
How this is worked out

Both sides are worked out on the same gross, then the employer's half of payroll tax is added back on the W-2 side — because the employer really does pay it. The headline is the gross a client would have to pay a contractor to match that total cost.

Net earnings from self-employment (1099 side)
Gross × 92.35%
IRC §1402(a)(12)
Self-employment tax (1099 side)
min(Net earnings, $184,500) × 15.3% + Additional Medicare
IRC §1401
The contractor pays both halves of the equivalent of FICA in one charge.
Take-home as a contractor
Gross − Self-employment tax − Federal income tax − State income tax
Form 1040 · Schedule C
Payroll tax withheld (W-2 side)
min(Gross, $184,500) × 6.2% + Gross × 1.45% + Additional Medicare
IRS Publication 15 (2026)
The employee pays only half. The other half is the employer's, and is invisible to the employee.
Take-home as an employee
Gross − Payroll tax withheld − Federal income tax − State income tax
Form W-2 · Form 1040
Employer's share of FICA
min(Gross, $184,500) × 6.2% + Gross × 1.45%
IRS Publication 15 (2026)
Not withheld from the employee's pay, but a real cost of employing them. This is the figure a naive comparison leaves out.
Equivalent 1099 gross for the same total cost
Solved so that contractor take-home equals employee take-home
Derived — solved numerically, not by a closed formula
There is no single formula for this. Income tax is progressive, so the gross cannot be found by dividing. The page solves it by bisection: guess a gross, work out the full take-home, and narrow the range until both sides match. Every figure in the result comes from the same bracket tables as the lines above.
Naive gap
Employee take-home − Contractor take-home
Derived — shown to demonstrate what the simple comparison claims
True gap
Equivalent 1099 gross − Salary
Derived — the honest difference in what the work costs

The formulas are shown as the authority defines them, in its own terms — the arithmetic is not copyrightable and the rates are public-domain US government material. What these lines cannot tell you is where your figures came from; that is what the table above is for.

Enter a gross figure and press Compare to see both sides.

Frequently asked questions

Is 1099 better than W-2?

Neither is better by itself — and the usual comparison is wrong. A 1099 worker pays both halves of FICA, about 15.3% on 92.35% of net profit. A W-2 employee pays one half, 7.65%, and the employer pays the rest. But that employer half is real money the employer spends to have you. If the same employer paid it to you as a contract rate instead, you would receive it as income and pay both halves yourself. Nothing is gained or lost; the money is routed differently.

So how much more should a 1099 rate be than a W-2 salary?

At minimum, enough to cover the employer's FICA contribution — 7.65% of wages up to the Social Security wage base, and 1.45% above it. On top of that, a 1099 must fund what the benefits covered: health insurance, any retirement match, paid time off, and the fact that unpaid downtime is now yours to absorb. The calculator above gives you the tax floor; the benefits figure is what you add on top of it.

Does the additional Medicare tax work differently for the two?

Yes, and it is easy to miss. The 0.9% applies to a 1099 worker's net profit above $200,000 single or $250,000 joint. For a W-2 employee it is withheld from wages above the same threshold — and the employer does not match it. That is the one piece of FICA where the two sides are not symmetric.

What can a 1099 worker deduct that a W-2 employee cannot?

Half of the self-employment tax is an above-the-line deduction, which reduces adjusted gross income. Beyond that a 1099 can deduct ordinary business expenses — mileage, a home office, equipment, software — and can fund a SEP IRA or Solo 401(k), which a W-2 employee generally cannot at the same amounts. Those deductions narrow the gap this page shows, and are not included in the figures above.

Does the state change the answer?

It changes the dollar amounts on both sides, but not the structure: state income tax applies to the 1099's profit and to the W-2's wages roughly the same way. Where it does differ is that some states treat self-employment income differently, and a few cities levy local taxes on wages that a contractor may not owe.

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