Why the same gross pay can produce a different result
W-2 employees split Social Security and Medicare payroll tax with the employer. A sole-proprietor contractor generally pays self-employment tax on net earnings.
Contractor expenses and self-funded health insurance can materially change the gross 1099 amount needed to match an employee job.
A $60 hourly contractor rate means something different at 2,000 billable hours than at 1,500 after holidays, sales, administration and gaps between contracts.
Texas and Florida do not impose a broad individual income tax, while states such as California and New York can materially change the employee-versus-contractor comparison.
What “break-even” means in practice
Using the project’s standard Georgia planning scenario with $10,000 of annual business expenses and $4,800 of self-employed health insurance, the modeled 1099 break-even is about $117,565 per year. A $125,000 contractor offer is therefore above the modeled take-home break-even in that scenario. Your result can change with state, expenses, health insurance and billable hours, so use the calculator rather than applying one fixed percentage premium.
See how the model is built and maintained
Review the W-2 and 1099 calculation flow, self-employment tax, QBI, state-tax treatment, break-even method, quarterly safe harbor, model limitations and primary IRS/SSA/state sources.
Why the project exists, how tax information is handled, how model changes are tested and what the calculators do not claim to replace.
State-specific 1099 vs W-2 comparisons
Progressive 2026 state tax plus contractor break-even.
No broad individual state income tax; federal tax and contractor costs still matter.
No broad individual state income tax with a full take-home comparison.
Progressive New York State tax and 1099 break-even.
Progressive state-tax context for contractor decisions.
Flat state-tax structure with local-tax scope called out separately.
Flat state-tax context plus realistic contractor overhead and billable time.
Georgia tax context with annual and hourly contractor break-even.
State-tax structure with take-home and billable-hours comparison.
State-tax and high-income surtax context plus contractor classification caution.
Flat-rate state context plus contractor break-even.
No broad wage income tax, but contractor costs and federal taxes still matter.
Michigan tax context with annual and hourly break-even.
2026 state structure with local-tax scope clearly separated.
Federal-taxable-income linkage and state modification context.
Graduated state-tax context for employee vs contractor pay.
Profession-specific contractor decisions
Billable engineering time, tools, contract gaps and full-compensation tradeoffs.
Client utilization, overhead, business-development time and contract risk.
Variable hiring workload, bonus tradeoffs and realistic paid hours.
Contract duration, coordination time, utilization and benefit replacement.
Creative software, equipment, revisions and lower freelance utilization.
Acquisition costs, retainers, tooling and non-billable business development.
Sessions, cancellations, insurance and realistic billable time.
Care coordination, documentation and contractor overhead.
Couple and family session mix and effective revenue-producing hours.
Professional costs, state context and 1099 break-even.
Independent web developers may pay directly for code editors, design tools, testing services, cloud hosting, domains, monitoring, password managers, project-management software, accounting help and replacement hardware.
A virtual assistant may need paid email, scheduling, document, CRM, password-management, time-tracking, transcription, invoicing, automation or project-management tools.
Independent photographers may fund cameras, lenses, lighting, storage, computers, editing software, galleries, backup systems, liability coverage, equipment insurance, travel and periodic gear replacement.
Independent accountants may pay for tax or bookkeeping software, secure document systems, e-signature tools, cloud storage, continuing education, professional memberships, cybersecurity services and professional-liability coverage.
Independent insurance agents may pay for licensing, renewals, continuing education, errors-and-omissions coverage, CRM systems, quoting tools, phone service, marketing, lead purchases and office expenses.
Convert a W-2 salary into a contractor target
Annual and hourly contractor break-even from an $80,000 salary.
Compare a $100,000 W-2 baseline with contractor gross.
Model taxes, contractor costs and billable-hours sensitivity.
Calculate the contractor financial floor for a $150,000 salary.
Enter any salary, state, expenses, insurance and billable hours.
Put the calculator on your own website
Use the tool that matches your question
Compare two offers and see which leaves more after estimated tax.
Start with W-2 salary and calculate annual and hourly break-even.
Estimate self-employment tax, federal/state tax and take-home.
Estimate the next federal safe-harbor payment and deadline.