1099 vs W-2 Equivalence Calculator
Enter a W-2 salary or 1099 rate to see the true break-even — accounting for SE tax, health insurance, retirement match, and unpaid vacation.
The hidden gap: A $80k W-2 salary costs the employer over $95k when you add payroll taxes, health insurance, and retirement match. A 1099 contractor must charge enough to cover all those extras themselves — plus self-employment tax.
What do you want to calculate?
Your Numbers
W-2 Salary
$80,000
Required 1099 Rate
$124,764
annual gross
SE Tax Burden
$16,781
13.5% of gross
Premium Required
+56.0%
above W-2 to break even
1099 Rate Benchmarks
$124,764
Annual 1099 gross needed
$531
Daily rate (235 billing days)
$66.36
Hourly rate (÷ 8 hrs/day)
W-2 Benefits You Must Self-Fund as 1099
Employer payroll tax (SS + Medicare)
7.65% of W-2 salary the employer pays on top — you pay all 15.3% as 1099
$6,120
Health insurance
Employer-sponsored coverage you must buy independently
$7,200
Retirement match
4.0% employer match you forgo
$3,200
PTO (${inputs.paidVacationDays} days)
Unpaid days off are lost revenue as a contractor
$4,615
Total W-2 compensation package
$96,520
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