Baseline answer for the default Georgia scenario
With $10,000 of annual business expenses and $4,800 of self-employed health insurance, the audited planning model puts the 1099 break-even at about $117,565 for a $100,000 W-2 salary. A $125,000 contractor offer is therefore above modeled break-even in this specific scenario.
That does not mean every $125,000 1099 offer beats every $100,000 employee job. Changing the state, benefits, insurance cost or realistic billable time can change the answer.
Why a 25% gross increase is not automatically a 25% raise
The contractor path has a different payroll-tax structure and may shift costs that were previously paid or subsidized by an employer. Business expenses and health insurance come out of contractor economics, while unpaid time can reduce the effective hourly value even when annual gross looks attractive.
The calculator compares modeled take-home rather than gross pay alone. That makes the question more useful: after the costs and taxes in your scenario, how much money actually remains?
Three checks before accepting the $125K offer
Add the employer health contribution, retirement match, bonus and other economic value you would lose.
Do not assume every employee work hour becomes a paid contractor hour.
Break-even is a floor. A short or uncertain engagement may need an additional premium.
When $125K can stop looking attractive
The offer can move closer to or below break-even if contractor expenses rise, self-funded insurance is expensive, billable utilization falls, or the W-2 package includes valuable employer-paid benefits. State tax can also change the comparison.
Use the optional full-offer analysis on the main calculator when the employee job includes meaningful bonus, health contribution, 401(k) match or paid leave that should be valued explicitly.