W2 vs Contractor Wage Growth
Annual raises compound slowly. Rate growth compounds fast. See exactly when — and by how much — contractor earnings surpass a W2 salary over time.
W2 Employment
Contractor / 1099
Contractor cumulative earnings surpass W2 in year 4.
Cumulative Earnings Trajectory
Cumulative Delta at Milestones
Year-by-Year Breakdown
| Yr | W2 Salary | Contr. Gross | Contr. Net | Δ This Yr | Cumul. Δ |
|---|---|---|---|---|---|
| 1 | $95,000 | $132,000 | $89,760 | -$5,240 | -5k |
| 2 | $97,850 | $142,560 | $96,941 | -$909 | -6k |
| 3 | $100,786 | $153,965 | $104,696 | +$3,911 | -2k |
| 4 | $103,809 | $166,282 | $113,072 | +$9,263 | +7k |
| 5 | $106,923 | $179,585 | $122,117 | +$15,194 | +22k |
| 6 | $110,131 | $193,951 | $131,887 | +$21,756 | +44k |
| 7 | $113,435 | $209,467 | $142,438 | +$29,003 | +73k |
| 8 | $116,838 | $226,225 | $153,833 | +$36,995 | +110k |
| 9 | $120,343 | $244,323 | $166,139 | +$45,796 | +156k |
| 10 | $123,953 | $263,869 | $179,431 | +$55,477 | +211k |
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