1099 Contractor vs. W2 Salary
The "Break-Even" Calculator. Find out exactly how much you need to charge as a freelancer to match your current corporate salary.
Current W2 Salary
Estimated Take-Home: $60,000
Needed 1099 Gross
$108,000
Hourly Rate: $51.92/hr
*To match take-home pay after 1099 taxes & $5k expenses
Why 1099 Rates Must Be Higher
When you move from W2 to 1099, you take on costs your employer used to pay. The "Rule of Thumb" is that your 1099 rate should be 25% to 40% higherthan your W2 hourly equivalent to account for:
- Self-Employment Tax: An extra 7.65% your employer used to pay.
- Benefits: Health insurance, 401k matching, and life insurance.
- Unpaid Time: Vacation, sick days, and holidays.