1099 vs W-2 offer comparison
A contract rate and a salary are not comparable numbers. This works out what each package is really worth, and the hourly rate you would need to break even.
Difference
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Enter both offers to compare what each is actually worth once tax and benefits are counted.
- W-2 net value
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- 1099 net value
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- Breakeven rate
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- Breakeven gross
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Common questions
How much more should a 1099 rate be than a W-2 salary?
Commonly 25 to 50% more, but the honest answer depends on the benefits attached to the salary. Employer-paid health cover and a 401(k) match are worth real money, and as a contractor you pay both halves of payroll tax.
What does a W-2 offer include that a rate does not?
Half of Social Security and Medicare, usually health insurance, often a retirement match, paid holiday and sick leave, unemployment cover, and a notice period. Only the first four show up in this calculation.
How do I convert a salary into an hourly rate?
Not by dividing by 2,080. Use the hours you would actually invoice, which is lower once unpaid time off and non-billable work are removed — this calculator asks for that number directly.
What people use next
Estimates based on published federal rules for tax year 2026. State and local tax is not included. This is general information, not advice about your situation.