Decision calculator
Contractor vs Employee Calculator
Compare a W-2 salary with a 1099 hourly rate after US FICA and self-employment tax, benefits, and costs, and find the break-even contractor rate.
Modeled result
Calculating…
Results update as you change the inputs.
Methodology and assumptions
Employee value = salary − employee FICA (6.2% Social Security up to the 2026 $184,500 wage base + 1.45% Medicare) + benefits. Contractor value = rate × billable hours − costs − self-employment tax (12.4% Social Security up to the wage base + 2.9% Medicare, on 92.35% of net earnings). The break-even rate equalizes the two. Income tax, the deductible half of SE tax, the 0.9% Additional Medicare Tax, and state taxes are excluded. Classification is a legal test, not a compensation choice; this tool does not determine worker status.
Currency outputs are rounded to the nearest minor currency unit.
Pricing last verified:
Frequently Asked Questions
What does the Contractor vs Employee Calculator calculate?
Compare a W-2 salary with a 1099 hourly rate after US FICA and self-employment tax, benefits, and costs, and find the break-even contractor rate.
How accurate is the Contractor vs Employee Calculator?
It is a planning estimate based on the inputs, formula, assumptions, and sources shown on this page. Actual prices, invoices, taxes, discounts, and outcomes can differ.
Which pricing source does the Contractor vs Employee Calculator use?
The calculator links to IRS self-employment tax guidance as its official source. The displayed pricing or reference data was last verified on 2026-10-01.
Are calculator inputs saved or sent to analytics?
Inputs are processed in your browser. Calculator values are not included in analytics events.