US W2 vs 1099 Comparison Calculator
Compare W2 employment vs 1099 contracting compensation. Shows tax impact, benefits, and total cost to employer for each arrangement.
$
W-2 Employee
Gross Income
$75,000
Federal Income Tax-$16,500
Social Security (6.2%)-$4,650
Medicare (1.45%)-$1,088
Net Pay (Take-Home)
$52,763
Typical Benefits
health$8,000
dental$500
retirement$3,000
pto$5,000
Benefits Value+$16,500
Total Compensation
$69,263
Employer also pays ~7.65% in matching payroll taxes
1099 Contractor
Gross Income
$75,000
Self-Employment Tax (15.3%)-$10,597
Federal Income Tax-$14,234
Business Deductions (est.)-$5,000
Net Pay (Take-Home)
$50,169
Your Responsibility
✓ Health insurance (no employer match)
✓ Retirement savings (no match)
✓ Disability insurance
✓ Quarterly tax payments
✓ Professional development
Total Costs to Budget For
Health insurance (~$400-600/mo)
+ Medicare tax (2.9%)
+ Office supplies/software
You pay the full 15.3% self-employment tax (employer + employee)
Net Pay Difference
-$2,594
Employee earns more
Tax Difference
+$2,594
Contractor pays more in taxes
Key Differences
W-2 Advantages
- ✓ Employer-provided benefits
- ✓ Employer matches taxes
- ✓ Stable income & job security
- ✓ Unemployment insurance
- ✓ Paid time off
1099 Advantages
- ✓ Flexibility and independence
- ✓ Multiple income streams
- ✓ Business expense deductions
- ✓ Tax-advantaged retirement plans
- ✓ Higher earning potential
Related Tools
US Salary vs Hourly Calculator
💰 FinanceCompare salary and hourly wage earnings. Calculate equivalent pay between job offers, account for benefits and show total annual compensation differences.
US Cost of Living Comparison
💰 FinanceCompare living costs between US cities and states. See housing, food, transport, healthcare price differences and calculate equivalent salary needed.