US federal only • 2026 brackets • standard deduction • deterministic
Enter annual gross pay once. This tool estimates take-home for W-2 and 1099 income under US federal rules only.
| Scenario | Estimated take-home |
|---|---|
| W-2 | — |
| 1099 | — |
| Difference | — |
| Item | Amount |
|---|
Notes: 1099 assumes net = gross (no expenses modeled). No state taxes. Estimates only—verify with official sources.
| Gross income | $100,000 |
| Standard deduction | −$16,100 |
| Taxable income | $83,900 |
| Federal income tax | $13,170 |
| Social Security tax (6.2%) | $6,200 |
| Medicare tax (1.45%) | $1,450 |
| Total tax | $20,820 |
| Take-home | $79,180 |
| Gross income | $100,000 |
| SE tax base (92.35% of gross) | $92,350 |
| Self-employment tax | $14,130 |
| 50% SE deduction | −$7,065 |
| Adjusted gross after SE deduction | $92,935 |
| Standard deduction | −$16,100 |
| Taxable income | $76,835 |
| Federal income tax | $11,616 |
| Total tax (income + SE) | $25,745 |
| Take-home | $74,255 |
At the same $100,000 gross income, the W-2 scenario keeps about $4,925 more.
At $200,000 gross, the W-2 advantage grows to $10,507. But at $300,000, it shrinks slightly to $8,814. That surprises most people. Here's why: Social Security tax is capped at $184,500 in wages. Once you pass that threshold, neither classification pays the 6.2% or 12.4% SS portion on additional income. Meanwhile, the 50% SE deduction keeps reducing the 1099 contractor's taxable income at higher brackets — so the gap narrows even though the 1099 contractor still pays more Medicare (2.9% vs 1.45% on every dollar).
W-2 path: gross → standard deduction → taxable income → federal brackets → income tax + employee FICA (6.2% SS up to $184,500, 1.45% Medicare) → take-home.
1099 path: gross → 92.35% SE base → self-employment tax (12.4% SS up to $184,500, 2.9% Medicare) → 50% SE deduction → adjusted gross → standard deduction → taxable income → federal brackets → income tax + SE tax → take-home.
The 1099 side assumes all gross receipts are net earnings (Schedule C with no business expenses). Self-employment tax is computed per Schedule SE. This is a federal-only estimate for a single filer using the 2026 standard deduction.
These are 2026 federal values and may change after tax law or inflation adjustments.
Why does 1099 show lower take-home at the same gross?
Because 1099 contractors pay self-employment tax at 15.3% — both the employer and employee halves of FICA. W-2 employees only pay 7.65%; the employer covers the rest. That difference alone accounts for most of the take-home gap.
What is the 92.35% self-employment tax adjustment?
The IRS doesn't make you pay SE tax on 100% of your earnings. Under IRC §1402(a)(12), only 92.35% of your net self-employment earnings are subject to SE tax. This roughly accounts for the employer-half deduction that W-2 employees don't pay.
Does this include the QBI deduction?
No. The Qualified Business Income deduction (Section 199A) can reduce 1099 income tax by up to 20% of qualified business income. This tool does not model it, so the 1099 side may overstate your actual tax burden.
Does this include state taxes?
No. This is federal-only. If you live in a state with income tax (California, New York, etc.), your real take-home will be lower for both classifications — and the 1099 gap may grow wider.
Is a $X/hour 1099 rate equal to the same $X/hour W-2 rate?
No. A $50/hour 1099 contract and a $50/hour W-2 wage are not equivalent after taxes. The 1099 rate needs to be higher to compensate for the self-employment tax burden. Annualize both rates and run them through this calculator to see the real difference.