W-2 salary to
1099 rate.

Why the 1099 rate is higher.

To replace a W-2 package on a 1099 basis, you need to cover:

• Salary equivalent — same take-home as your W-2 paycheck.
• Lost benefits — your health insurance, 401(k) match, paid time off, life insurance. Typical: 15-25% of salary.
• Higher tax bill — full 15.3% SE tax instead of half-FICA. Partly offset by deductions (half-SE, QBI, expenses) but net higher.
• Non-billable time — vacation, sick, training, sales, admin. You bill ~25-28 of 40 hours.

Result: a $100k W-2 typically requires $130-$160k in 1099 gross to truly match — translating to roughly $110-$135/hour assuming 1,200 billable hours.

More freelancer math.