Gross pay is the wrong place to stop the comparison
A W-2 salary and a 1099 offer can have very different gross amounts while producing a much smaller difference in spendable income. The employee side has employee payroll tax and withholding. The contractor side can include self-employment tax, deductible business expenses, self-employed health insurance and different state-tax treatment.
The calculator above estimates both take-home amounts and then solves the 1099 gross needed to match the W-2 take-home. That break-even target is usually more useful than comparing headline salary alone.
What the after-tax comparison includes
Both paths use the project’s validated 2026 federal planning model for the current scope.
The employee and sole-proprietor contractor paths do not carry the same payroll-tax burden.
Choose your state rather than applying one generic state-tax percentage.
Entered business expenses and health insurance affect the amount left from contractor gross.
Example: why $125K 1099 can beat $100K W-2 without being a 25% net raise
In the standard Georgia scenario used across Analyze My Income, a $100,000 W-2 salary has a modeled contractor break-even of about $117,565 when the contractor has $10,000 of business expenses and $4,800 of self-employed health insurance. A $125,000 offer clears that modeled floor, but the after-tax advantage is much smaller than the $25,000 gross-pay gap suggests.
This is exactly why the decision should be made on take-home and full compensation, not gross salary alone.
Taxes are only one part of the decision
If the W-2 job includes meaningful bonus, employer health contributions, retirement match, paid leave or other benefits, compare the full package. The main calculator includes an optional full-offer analysis that values those items separately and can add a contractor risk margin above pure break-even.
The tax result is a planning estimate, not tax-filing advice. Local taxes, credits, itemizing, entity elections and other special situations can change an individual outcome.