1099 vs W-2 Rate Calculator
A W-2 salary and a 1099 contract rate are not the same money. As an employee, your employer quietly pays half your FICA taxes, funds your health insurance and retirement match, and pays you while you take vacation. As a contractor, all of that becomes your responsibility. This calculator translates a W-2 package into the equivalent 1099 gross you would need to charge to come out even — and back again — so you can compare two offers on the same footing instead of anchoring on the headline number.
W-2 employee package
Reverse check
Equivalent 1099 gross rate
$123,650.00
23.65% above the $100,000 base salary
Salary + employer FICA
$107,650.00
1099 gross → W-2 equivalent
$114,051.09
How the equivalent rate is built
W-2 base vs 1099-equivalent components
Estimate only, not tax or financial advice. It excludes your personal tax bracket, state taxes, deductions, and business expenses. Confirm with the IRS guidance or a tax professional.
Compare scenarios
Run the same calculation with two or three input sets side by side. Differences are highlighted; every number comes from the same tested formula as the calculator above.
| Input | Scenario A | Scenario B |
|---|---|---|
| W2 Salary | ||
| Employer Fica Pct | ||
| Benefits Value | ||
| Pto Value | ||
| Contractor Gross |
How it works
The forward direction converts a W-2 salary into an equivalent 1099 gross. It starts with your base salary, adds the employer's share of FICA (Social Security and Medicare, 7.65% by default) that a contractor must cover themselves as self-employment tax, then adds the annual dollar value of employer-paid benefits and paid time off. The result is what you would need to bill, gross, before your own taxes and expenses, just to match the total value of the employee package.
The reverse direction takes a contractor's gross billings and estimates the W-2 salary it is roughly comparable to. It deflates the gross by the employer FICA factor and then subtracts the benefits and PTO value you now have to self-fund. This is a deliberately simple deflation, not a full tax model, so treat it as a directional sanity check rather than a precise conversion of one number into the other.
The breakdown table and chart split the equivalent rate into its parts — base salary, employer FICA, benefits, and PTO — so you can see exactly which costs are driving the gap. The uplift percentage tells you how much higher the 1099 gross has to be than the raw salary. Enter zero for any component that does not apply to your situation, such as a contract that genuinely includes some benefits.
Frequently asked questions
Why does a 1099 rate need to be higher than a W-2 salary?+
Because a contract rate has to absorb costs an employer normally covers. As a 1099 contractor you pay both halves of FICA through self-employment tax — the roughly 7.65% employer share on top of your own — and you self-fund health insurance, any retirement match, and every day of vacation, holiday, or sick leave you take. You also carry unpaid gaps between contracts, business expenses, and your own tax withholding. Matching only the salary number leaves all of those costs unpaid, which is why the break-even gross is meaningfully higher than the equivalent salary.
What is self-employment tax and is it the same as employer FICA?+
Self-employment tax is how the IRS collects Social Security and Medicare from people who are not on a payroll. An employee splits FICA with their employer, each paying about 7.65%; a self-employed person owes the full combined rate of roughly 15.3% on their net self-employment earnings. This calculator models only the employer-side share shifting onto you, so it is a simplified view of the FICA gap. Your actual self-employment tax depends on your net income, the Social Security wage base, and a deduction for the employer-equivalent portion.
Can I use this to decide between a job offer and a contract?+
It is a starting point for comparing offers, not tax or financial advice. This tool estimates a break-even conversion using the numbers you enter, but it does not account for your specific tax bracket, state taxes, deductions, business write-offs, the qualified business income deduction, or the value of employment protections and unemployment eligibility. Real classification as a contractor versus an employee is also a legal determination that depends on the working relationship, not just what an offer letter says. Confirm your own numbers with the IRS guidance or a tax professional before deciding.