W2 vs 1099 Comparison
Don't be fooled by a high hourly rate. Calculate exactly how much you'll keep in your pocket after self-employment taxes compared to a traditional salary.
The Hidden Cost
Contractors pay an extra 7.65% in FICA taxes and receive no paid time off or health insurance. Aim for at least 30-40% more than your W-2 equivalent.
The 1099 Premium
A common mistake is assuming that a $75/hr contract is always better than a $100k salary. In reality, a contractor must account for:
- Tax Responsibility+7.65% SE Tax Burden
- Benefits GapHealth Insurance & 401k
- Unpaid TimeNo PTO or Public Holidays
- Admin OverheadInvoicing & Quarterly Taxes
Net Pay Factors
Our calculator analyzes your specific tax profile. For W2 employees, the employer pays the other half of your payroll taxes. For 1099 contractors, that burden falls on you entirely.
Pro Recommendation
"Generally, a 1099 hourly rate should be at least **1.5x to 2x** your equivalent W-2 hourly rate to maintain the same lifestyle once health insurance and retirement are factored in."
Know Your Worth.
Whether you are negotiating a freelance gig or a senior engineering role, the 'real' salary is what you take home after the IRS and overhead. Use this tool to negotiate from a position of data-driven strength.