1099 vs W-2, side by side.
Compare your take-home pay as a 1099 contractor vs a W-2 employee at the same gross income. See where the money goes — and which path leaves more in your pocket. Includes SE tax, QBI, FICA, and business expenses.
Enter your numbers
The math, explained.
Same gross income, different tax treatment. Here's why the numbers diverge.
If you take the offer as W-2
- FICA: 7.65% withheld from your paycheck (6.2% Social Security up to $184,500, 1.45% Medicare on all). Your employer pays a matching 7.65% — invisible to you.
- Federal income tax: brackets applied to gross minus standard deduction.
- State income tax: applied per your state's rules.
- No business expenses. The Tax Cuts and Jobs Act eliminated unreimbursed employee business expense deductions through 2025.
- No QBI. Section 199A only applies to qualified business income.
If you take the offer as 1099
- Self-employment tax (15.3%): applied to 92.35% of net SE income. You pay both halves of FICA — but get a deduction for the employer-equivalent half.
- Half-SE deduction: 50% of SE tax is an above-the-line deduction, reducing your AGI.
- Business expenses: fully deductible against gross income before SE tax is computed.
- QBI deduction (20%): on qualified business income, after the half-SE deduction. Major win for moderate earners.
- Federal + state income tax: applied to the (smaller) post-deduction amount.
The 1099 trade-off
1099 gives you more deductions (business expenses, QBI, retirement), but you pay the full 15.3% SE tax on top of income tax. The break-even depends heavily on:
- Business expenses — every $1 in expenses saves you ~$0.30+ in combined tax (15.3% SE + ~14% federal + state).
- State — high-tax states penalize 1099 less because the state rate applies to a smaller post-deduction base.
- Income level — at very high incomes, the SE tax cap on Social Security helps 1099 more.
- Hidden costs not in this calculator: health insurance ($500-2,000/mo for self-employed vs. employer-subsidized), retirement match, paid time off, unemployment insurance.
Most freelancers gross 25-40% more as 1099 to break even on benefits and tax differences. Use this calculator as a starting point, then add the value of benefits you'd lose.
Key tax differences.
A side-by-side breakdown of how the two paths differ across taxes, benefits, and deductions.
For a deeper dive on the math, see our 1099 vs W-2 take-home article.
Who comes out ahead?
$80k offer, single, Texas (no state tax), $0 expenses
W-2: ~$63,000 take-home. 1099: ~$60,500 take-home. W-2 wins by ~$2,500/year because there's no state tax to advantage 1099, no business expenses to deduct, and SE tax is the dominant difference.
$80k offer, single, Texas, $15,000 expenses
W-2: ~$63,000. 1099: ~$64,500. 1099 wins by ~$1,500/year — business expenses + QBI tip the balance.
$150k offer, married jointly, California, $20,000 expenses
W-2: ~$103,000. 1099: ~$108,000. 1099 wins by ~$5,000/year — high state rate amplifies deduction value, business expenses are substantial, QBI applies cleanly.
$250k offer, single, NYC, $30,000 expenses
W-2: ~$163,000. 1099: ~$167,000. 1099 wins by ~$4,000/year — Social Security cap helps 1099, big expenses + QBI offset the SE tax.
Bottom line: 1099 usually wins for freelancers with real business expenses ($10k+) in moderate-to-high-tax states. W-2 wins for low-income or no-expense roles. This calculator gives you the math; the rest is the value of benefits, paid time off, and stability.