Why Arizona changes the comparison
Arizona uses a flat individual income-tax structure in the current audited model, but the state tax is only one part of the W-2 versus 1099 decision. A contractor also needs to account for federal self-employment tax, business expenses, health-insurance costs and the number of hours that can actually be billed. Those inputs can move the break-even target even when the state formula itself is relatively simple.
The useful question is not whether a contractor pays “more tax” in the abstract. It is whether the proposed 1099 gross produces enough estimated take-home to replace the W-2 baseline after the costs that shift from employer to contractor.
How to use the Arizona break-even result
Treat the calculated break-even gross as a minimum planning reference. If the current offer is below that amount, the tool shows the shortfall and a minimum counter-offer target. If it is above break-even, you can still decide whether you need additional compensation for contract duration, unpaid time off, benefit replacement or business risk. Use realistic billable hours rather than automatically assuming a full 2,080-hour employee year.