Contractor vs Employee Calculator
Compare net earnings between a W2 employee salary and a 1099 contractor rate. This comparison tool helps you calculate the financial trade-offs between full-time W2 employment and 1099 independent contracting.
Formula & Math Logic
Estimates taxes: W2 assumes 20% average income tax. 1099 assumes 15.3% self-employment tax on net profit plus 20% average income tax, minus business expenses.
Worked Calculation Example
$100k W2 vs $75/hr 1099 (2,000 hrs)
At $75/hr contracting, revenue is $150k. W2 net is ~$80k, contractor net after tax & expenses is ~$92,570. Contractor is higher.
Frequently Asked Questions (FAQ)
Why do contractors need to charge higher rates?
Contractors pay self-employment tax (social security/medicare) and receive no benefits, paid time off, or insurance.
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