W-2 vs. 1099
Take-Home Pay Calculator

There is no universal percentage. Your business expenses, tax year, filing status, coverage costs, unpaid time and employer benefits affect the comparison. This calculator finds the annual contractor revenue needed to match modeled W-2 cash take-home, holding entered dollar expenses and after-tax benefit costs fixed. Omitted deductions and benefits can change that figure.

An employee generally pays their share of Social Security and Medicare through payroll. A contractor pays self-employment tax on eligible net earnings and may pay business and benefit costs. The deductible half of ordinary self-employment tax reduces modeled taxable income. These differences can produce different cash results at equal gross pay.

No. QBI eligibility and limits depend on your business and household tax situation. Excluding QBI can overstate a qualifying contractor’s income tax and the contractor revenue needed to match employee take-home. Have a tax professional review the complete comparison before deciding.

This tool estimates supported federal taxes only. Texas has no individual state income tax, but other state, local or business taxes can still matter. Outside Texas, add a separate state and local tax review. The calculator does not apply a location-based tax adjustment.

First convert both offers to realistic annual amounts. For example, $60 per hour times 40 billable hours times 48 paid weeks equals $115,200 annual contractor revenue. Use billable hours and unpaid time that fit your arrangement, then enter that annual revenue. Employer paid leave and retirement matches are not valued automatically.

Optional benefit inputs are after-tax cash costs only. They do not reduce taxable income or payroll taxes. Do not enter pre-tax employee premiums or retirement contributions as if they were after-tax costs. Self-employed health-insurance deductions and benefit tax effects are outside this model.

This tool compares two alternative scenarios for one worker with no other household income. Joint filing assumes a spouse with no income. It does not calculate combined jobs or household wages. Use the related 1099 calculator for its supported mixed-income scenarios, or request a household estimate.

No. Monthly mode divides annual modeled take-home by 12. Your actual paycheck depends on pay frequency, withholding, deductions and employer payroll settings. This comparison is an annual tax and cash-flow illustration; it does not estimate a refund or exact paycheck withholding.

Worker classification follows the actual working relationship, including control and independence. A preferred tax result or a contract label does not determine the correct status. Review IRS employee and independent-contractor guidance when assessing an arrangement.