1099 vs W-2: Tax Differences & Calculator

The difference between 1099 and W-2 can mean thousands in taxes and benefits.

W-2 Employee

Employer withholds taxes and pays half of FICA (7.65%). Benefits: health insurance, 401(k) match, PTO, workers' comp.

1099 Contractor

No tax withholding. You pay both halves of FICA (15.3%). Make quarterly estimates. Deduct business expenses. Eligible for QBI deduction (20%).

The 1099 Premium

A $100K W-2 salary costs the employer ~$107,650. A 1099 worker needs $130-150K to match that total compensation after SE tax, insurance, retirement, and PTO.

Use our self-employment tax calculator to compare your specific numbers.

Related Tools:

Calculate your self-employment tax

Frequently Asked Questions

How do I know if I'm misclassified?
IRS 'right to control' test: who decides how, where, and when you work? File Form SS-8 if misclassified.
Can I be W-2 and 1099 simultaneously?
Yes. Many work a W-2 day job and freelance evenings/weekends. Report all income and pay SE tax on freelance earnings.