⚖️W-2 vs 1099 Calculator — What Contract Rate Matches a Salary?

What it is

A two-sided comparison of employment against contracting on the same money, and the reverse calculation people actually need: the contract revenue that matches a salary once benefits and the employer half of payroll tax move onto you.

How it works

The employee side runs IRS Publication 15-T withholding plus the employee half of FICA. The contractor side runs Schedule SE self-employment tax and the income-tax brackets on profit after business expenses. The equivalent rate is then solved by iteration, because the self-employment and income-tax stack is not linear — a fixed percentage uplift would be wrong at most incomes.

Getting the most from it

1. Enter the salary on offer and the annual value of employer benefits — Box 12 code DD on a W-2 gives the health portion.
2. Set paid days off, which contractors are not paid for and which reduce billable days.
3. Add the business expenses contracting would create.
4. Read the equivalent revenue, then the day and hourly rates derived from it.

Reading your result

The uplift is structural rather than a negotiating stance: half of Social Security and Medicare simply moves from the employer to you. Read the two panels together — the same headline number produces materially different value on each side.

What it can't tell you

Federal only. It does not model state taxes, a QBI deduction above the threshold, self-employed retirement plans, or the cost of buying individual health coverage — often the largest single line. It also cannot tell you which classification is lawful; that is a legal test, not a choice.