1099 vs W-2 True Cost Calculator
Compare total employer cost and worker take-home pay between a W-2 employee and 1099 contractor at the same pay rate. Includes FICA, benefits, and SE tax.
$100,000
$
Benefits (W-2 only)
$7,200
$
4%
%
15 days
days
$2,000
$
Net Difference (1099 vs W-2)
$-4,925
As a 1099 contractor, you pay $4,925 more in taxes. Net, the W-2 position is better by $4,925 (before counting benefits value).
Employer Perspective
W-2 Employee
Gross Salary$100,000
Employer FICA (7.65%)$7,650
Benefits Total$18,969
Workers Comp (~1%)$1,000
Total Employer Cost$127,619
1099 Contractor
Contract Amount$100,000
No FICA, No Benefits$0
Total Cost$100,000
Worker Take-home
W-2 Employee
Gross Salary$100,000
Employee FICA (7.65%)โ $7,650
Est. Federal Taxโ $13,614
Net Take-home$78,736
1099 Contractor
Gross Contract$100,000
SE Tax (15.3%)โ $14,130
Est. Federal Taxโ $12,060
Net Take-home$73,811
This calculator provides estimates for educational purposes only. Consult a qualified tax professional for advice specific to your situation.
Related Calculators
Frequently Asked Questions
A W-2 worker is an employee โ the employer withholds taxes, pays half of FICA, and typically provides benefits. A 1099 worker is an independent contractor โ responsible for their own taxes (self-employment tax) and receives no employer benefits.
Beyond the gross salary, employers pay an additional 7.65% for their share of FICA (Social Security + Medicare), plus benefits (health insurance, 401k match, PTO), workers comp insurance, and unemployment taxes. Total cost is typically 25โ40% above the base salary.
1099 contractors pay self-employment tax of 15.3% (12.4% Social Security + 2.9% Medicare), which covers both the employer and employee portions of FICA. W-2 employees only pay the 7.65% employee portion โ the employer covers the other half.
Yes, 1099 contractors can deduct ordinary and necessary business expenses (home office, equipment, travel, etc.) on Schedule C, reducing their taxable income. W-2 employees generally cannot deduct work-related expenses after the 2017 tax reform.
It depends on your priorities. W-2 offers stability, benefits, and lower personal tax burden. 1099 offers flexibility, deduction opportunities, and potentially higher gross pay. Many factors beyond taxes matter โ health insurance, retirement, liability, and career goals.