Michigan state tax belongs inside the break-even calculation
Michigan uses an individual income-tax rate that must be applied together with the federal calculation rather than approximated as a generic national rule. The audited engine keeps the federal and state bases separate, so the state result is calculated from the correct state starting point under the project model.
That state calculation is only one component of the decision. A contractor can also pay self-employment tax and may personally fund health insurance, software, equipment or other business costs. These differences explain why equal gross pay does not imply equal take-home.
Use break-even before choosing a contractor rate
Start with the W-2 salary you are replacing, then enter the actual contractor offer and your expected costs. The solver finds the 1099 gross needed to match the W-2 estimated net amount. Dividing that result by realistic billable hours produces an hourly reference that is more useful than a simple salary divided by 2,080. Any premium above break-even can then be judged separately for contract risk, benefits and profit.