1099 vs W-2 calculator
A contract rate and a salary aren't comparable numbers. Contracting means paying both halves of payroll tax, buying your own benefits, and eating your own time off.
Estimate only. Figures update as you type. Not tax advice — see the note at the bottom of this page.
The 1099 contract offer
The W-2 salary offer
What the contract rate has to cover
The comparison subtracts the employer's half of Social Security and Medicare, roughly 7.65% of earnings, because as a contractor you pay it yourself. It also subtracts the costs an employer would otherwise absorb: health insurance, retirement matching, equipment, software, and professional insurance.
The unpaid weeks matter more than people expect
A salaried employee gets paid during vacation, holidays, and sick days. A contractor billing hourly does not. Dropping paid weeks from 52 to 46 is a 12% cut to contract earnings that never appears in the rate itself, and it's the single most common omission when people compare offers.
What this can't price
Contracting carries income volatility and gaps between engagements. Salaried work carries less control over your schedule and clients. Neither shows up as a number. Treat the output as a financial baseline, not a verdict.
Common questions
What's the rule of thumb for converting salary to a contract rate?
A common starting point is dividing the salary by 1,000 and using that as an hourly rate, then adjusting upward for benefits and unpaid time. It's a heuristic rather than a calculation.
Should I include the employer 401(k) match?
Yes, if you would realistically capture it. Include the match, the employer share of health premiums, and any benefit you'd have to replace out of pocket as a contractor.
Does corp-to-corp change this?
It can change tax treatment meaningfully depending on entity structure and how you pay yourself. That's a situation worth walking through with a tax professional.