About the Contractor vs. Employee Calculator
Going 1099 means covering costs an employer used to absorb: both halves of Social Security and Medicare, your own health insurance and retirement, and the hours you can't bill. This calculator estimates the contract hourly rate that leaves you as well off as a given salary.
How it’s calculated
Equivalent 1099 revenue ≈ (salary + benefits) × (1 + 7.65% extra self-employment tax) + business expenses. Divide by billable hours per year to get the hourly rate.
Example calculation
Matching a $100,000 salary with $15,000 of benefits, on 1,800 billable hours, needs roughly $70/hour as a 1099 contractor.
Frequently asked questions
Why do contractors charge more?
They pay the employer's share of payroll taxes, buy their own benefits, get no paid time off, and can't bill every working hour — so a 30–50% premium over the salaried equivalent is common.
What are the upsides of 1099?
More control, potential business-expense deductions, and often higher gross pay. This is a simplified estimate — a tax professional can model your specific situation.
This is a simplified estimate for general guidance only and is not tax advice. It does not account for every credit, deduction, or state and local rule. Consult a qualified tax professional for your situation.