Freelance Tax Strategy
1099 vs. W-2 Calculator
Compare the true value of an employee salary versus independent contractor pay, factoring in the 15.3% SE tax penalty.
Target Gross Income
$
W-2 Hidden Value
$
$
Employer-paid perks that a 1099 contractor must pay out of pocket.
1099 Business Deductions
$
Software, home office, equipment, and travel that lower your taxable SE income.
W-2 True Value
$0
Gross - FICA + Benefits
1099 Net Value
$0
Gross - Expenses - SE Tax
Employee FICA Tax 7.65% deducted by employer
-$0
1099 Self-Employment Tax 15.3% paid entirely by you
-$0
The "Gig Penalty" Difference in actual lifestyle value
-$0
1099 Break-Even Target
$0
You must charge this amount as a contractor to match the W-2 lifestyle.
2026 Tax Note: This tool highlights the FICA (Social Security & Medicare) tax disparity. W-2 employees pay 7.65%, while 1099 contractors pay the full 15.3% "Self-Employment Tax" (calculated on 92.35% of net business income). This calculator uses the projected 2026 SS wage base limit of $175,000. It does not calculate federal/state ordinary income tax, as those brackets generally apply similarly to both classifications.