Compare take-home pay, find your real break-even contractor rate, and see the minimum counter-offer needed to match your W-2 compensation.
YOUR INPUTS
The employee salary you want the contractor offer to match.
Annual gross contractor compensation before expenses and tax.
Planning estimate for the current validated project scope: primarily single filer, resident ordinary-income scenario, sole-proprietor 1099 path and no itemizing. Local taxes and special situations can differ.
DECISION
VISUAL CHECK
A W-2 salary and a 1099 offer should not be compared dollar for dollar. The contractor side can include self-employment tax, personally funded health coverage, business expenses and unpaid non-billable time. This calculator uses the audited tax path to estimate both take-home values, then solves for the contractor gross amount that reaches the W-2 take-home target. That break-even amount is a financial reference point for deciding whether the current offer is enough.
There is no universal 20% or 30% premium. The required amount changes with salary, state, expenses, health insurance and billable hours. Once you know break-even, you can decide whether you also require an additional margin for contract risk, benefit replacement, downtime or profit.
Convert the annual break-even gross into an hourly target using hours you realistically expect to bill, not automatically 2,080 hours. If the current offer is below break-even, the calculator shows the minimum counter-offer needed to reach the modeled W-2 net target.
A stronger decision considers the compensation package and contractor risk, not just the tax delta.
Compare employee premiums with what you would pay independently.
Vacation, holidays and sick time may become unpaid.
Include employer matching or contributions you would lose.
Software, equipment, insurance and professional costs matter.
Duration, termination terms and gaps between projects affect value.
Admin, sales and documentation reduce revenue-producing hours.
No. Compare net compensation, costs, benefits and risk rather than the headline gross amount.
It is a useful minimum financial reference. Your actual negotiation target can be higher if you need compensation for additional risk or margin.
No. It is a planning estimate under the validated model scope and does not replace professional tax advice or a filed return.