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.

2025 IRS brackets · 50-state coverage · Includes SE tax, QBI, FICA, business expenses

Compare your scenarios

Enter your numbers

The dollar amount the employer or client is paying you. We'll compute both scenarios from this.
Software, mileage, home office, etc. W-2 employees can't deduct these.
401(k) for W-2 / SEP-IRA or Solo 401(k) for 1099. Reduces taxable income for both.
What this calculator does

The math, explained.

Same gross income, different tax treatment. Here's why the numbers diverge.

If you take the offer as W-2

If you take the offer as 1099

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:

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.

Advertisement
1099 vs W-2

Key tax differences.

A side-by-side breakdown of how the two paths differ across taxes, benefits, and deductions.

W-2 Employee
1099 Contractor
Tax form
Receives a W-2 from each employer at year-end. Wages, withholding, and FICA contributions are pre-reported to the IRS.
Receives a 1099-NEC from each client paying $600+, plus possibly a 1099-K from payment processors. Files Schedule C and Schedule SE with Form 1040.
Tax withholding
Federal, state, and FICA tax automatically withheld from each paycheck by the employer. No quarterly payments required.
No taxes withheld. Pays estimated taxes quarterly to the IRS via Form 1040-ES (or risk underpayment penalties).
FICA / SE tax
Pays 7.65% (employee half of FICA). Employer pays the matching 7.65% — invisible to the employee.
Pays the full 15.3% self-employment tax (both halves) — but deducts half above-the-line.
Deductions
Limited. The TCJA eliminated unreimbursed employee expense deductions through 2025. Standard deduction only.
Deducts ordinary business expenses (Schedule C), home office, mileage, software, retirement contributions, self-employed health insurance, and the 20% QBI deduction.
Benefits
Employer-subsidized health insurance, 401(k) match, paid time off, life insurance, unemployment insurance, workers' comp.
No employer benefits. Buys own health insurance (deductible above-the-line). Can save much more for retirement via SEP-IRA / Solo 401(k) ($70k+ limit).
Income stability
Predictable paycheck. Protected by labor laws. Can be terminated but typically gets notice + severance.
Variable income. Multiple clients = diversification. Can be terminated mid-contract. Carries full business risk.
Filing complexity
Simple. Form 1040 + W-2 inputs. Many use a free or low-cost filing service.
More complex. Form 1040 + Schedule C + Schedule SE + Form 1040-ES (quarterly). Most use Self-Employed-tier tax software or a CPA.

For a deeper dive on the math, see our 1099 vs W-2 take-home article.

Real examples

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.

Related guides

Go deeper.