Free 1099 vs W-2 Calculator — The Break-Even Rate

Last updated: April 17, 2026

MoneyMath's 1099 vs W-2 calculator finds the contractor hourly rate needed to match an employee offer after taxes, benefits, PTO, business expenses, and self-employment tax.

Free to useRuns in your browserSource-backed assumptions

Free 1099 vs W-2 calculator with magic break-even number. See the exact hourly rate where contractor matches employee, benefits valuation, side hustle tax reality, and negotiation premiums.

Use the 1099 vs W-2 Calculator to compare realistic scenarios before making a money, health, or planning decision.

Adjust the inputs and review the result breakdown so you can see which assumptions matter most.

How to use this calculator

Step 1Enter your starting information. Add the core inputs requested by the 1099 vs W-2 Calculator, such as amounts, dates, rates, income, weight, or other scenario details.
Step 2Review the calculated result. Read the headline answer first, then scan the supporting breakdown, chart, or comparison table.
Step 3Compare another scenario. Change one input at a time to understand what drives the result and which option is most realistic.

Formula, Sources & Assumptions

Formula

Break-even contractor rate compares after-tax contractor income with W-2 salary plus employer-paid benefits and PTO value.

Assumptions

Federal tax and FICA use 2026 assumptions.
Benefit values are user-entered estimates, not employer plan valuations.
State tax, local tax, and business entity elections are not fully modeled.

Sources

IRS 2026 tax inflation adjustmentsFederal brackets, standard deduction, and indexed tax items.
SSA 2026 Social Security changesOASDI wage base and FICA context.
IRS 2026 retirement plan limits401(k), IRA, and catch-up contribution limits.