W-2 vs 1099 Comparison
Find out what freelance rate you need to match your W-2 salary after accounting for taxes and lost benefits.
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W-2 Employment Details
Employer-Provided Benefits
Typical: $8,000-$15,000/year
Typical: 3-6% of salary
20 days × daily rate ($288)
1099 Freelance Details
Software, accounting, home office, equipment, etc.
Break-Even Analysis
Required 1099 Income
Side-by-Side Comparison
Detailed breakdown of W-2 employment vs 1099 contract work
| Category | W-2 Employee | 1099 Contractor |
|---|---|---|
| Gross Income | $75,000 | $109,238 |
| + Employer Benefits | +$19,519 | $0 |
| Total Compensation | $94,519 | $109,238 |
| - FICA / Self-Employment Tax | -$5,738 | -$15,435 |
| - Federal Income Tax | -$8,114 | -$10,142 |
| - Additional Business Expenses | $0 | -$5,000 |
| = Net Take-Home | $61,148 | $78,661 |
| Effective Tax Rate | 18.47% | 23.41% |
Benefits Valuation Guide
Individual plans: $400-$700/month ($5K-$8K/year)
Family plans: $1,200-$1,500/month ($14K-$18K/year)
Typical: 3-6% of salary (up to IRS limits)
Average: 4.5% × your salary
15 days PTO = 6% of annual salary
20 days PTO = 8% of annual salary
Hidden Costs of W-2 Employment
W-2 employees can't deduct most work expenses
Fixed schedule, location requirements, less autonomy
Salary increases typically 3-5% annually
Average: 1-2 hours/day = 250+ hours/year unpaid
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Disclaimer
This calculator provides estimates for educational purposes only. Actual tax liability depends on many factors including state taxes, additional deductions, tax credits, and specific circumstances. Consult with a qualified tax professional or CPA for personalized advice.