1099 vs W2 Take-Home Comparator

Compare your actual take-home pay between a W2 salary offer and a 1099 contract rate, accounting for self-employment tax.

Methodology

Self-employment tax = 92.35% of net profit, taxed at 12.4% Social Security (capped at the $184,500 2026 wage base) plus 2.9% Medicare, plus 0.9% Additional Medicare Tax above the IRS threshold for your filing status. W2 FICA uses the employee-only rates (6.2% / 1.45%). Federal tax uses 2026 IRS brackets (Rev. Proc. 2025-32). State tax is currently modeled for a limited set of states — see the warning above if yours isn't covered yet.

Worked example

A single filer in Texas comparing an $80,000 W2 salary to a $100,000 1099 contract, with $12,000 in lost benefits and $3,000 in deductible business expenses, nets about $64,700 as a contractor versus $58,900 as a W2 employee at the same $100k/$80k headline numbers — the contractor comes out ahead here mainly because $100k is meaningfully more than $80k, not because contracting is inherently better once you account for the ~$13,700 in self-employment tax.

Limitations

• State tax is only modeled for a handful of states today (see the in-app warning if yours isn't covered) — everyone's real number will differ once full state coverage lands.
• Head-of-household bracket thresholds below the 24% band are estimated, not yet directly verified against the final published IRS table.
• This does not account for the Qualified Business Income (QBI) deduction, health insurance premium deductions, or self-employed retirement plan contribution limits beyond a flat percentage — all of which can meaningfully change a real contractor's numbers.