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W-2 vs 1099 Calculator

Compare an employee offer with a contract arrangement: cash, employer-paid benefits, business costs, payroll and self-employment tax, effective hourly value and the contractor rate that reaches comparable value before federal income tax. An optional federal income tax estimate is available when you choose a filing status. Everything is calculated on your device.

Built for tax year 2026. Federal amounts only. Tax rules and forms can change.

Classification is not a preference

Employee or independent contractor status depends on the actual working relationship and applicable law. It is not a choice based on preference or on which option shows a lower tax. This page does not decide your status and does not give tax, legal or accounting advice.

W-2 employee

Pay and hours

Cash wages and the working time they are based on.

Used only to define a standard workday for the paid-time-off illustration.

Zero overtime hours produces zero overtime pay.

A multiplier such as 1.5. Overtime eligibility depends on your role and applicable law.

Counted in the first year only.

Employer-paid benefits

Value provided by the employer. Never added to cash wages.

Shown annualised as × 12.

Costs you pay

Amounts you pay from your own pocket. Counted once.

Shown annualised as × 12.

Paid time off

Paid days are already inside your salary. They are shown as an illustration and never added to cash.

1099 independent contractor

Rate and hours

Revenue before any business cost.

Worked but never billed. Affects the time-adjusted figure only.

Unpaid days produce no revenue, so they are reflected in your working weeks.

Business costs

Economic costs of running the work. Whether a cost is deductible depends on your situation and is not decided here.

Counted in the first year only.

Used only in the optional federal estimate and in self-employment tax. PaycheckVista does not decide what is deductible. Leave blank if you are not sure.

Health and retirement

Kept separate from business expenses and from any tax deduction.

Shown annualised as × 12.

Your own saving. Not treated as a deduction here.

Optional tax details

Without a filing status, no federal income tax figure is shown at all. Nothing here identifies you.

Leave deductions blank to use the 2026 standard deduction for the selected filing status.

W-2 results

1. Gross cash wages
$0.00
Why?

Base pay plus any overtime you enabled. Benefits and paid time off are not included here.

2. First-year gross cash
$0.00
Why?

Includes the sign-on bonus once. It does not repeat.

3. Wages inside the Social Security wage base
$0.00
Why?

Year-to-date wages and other W-2 wages use the $184,500 wage base first, so no wage is counted twice.

4. Social Security tax (6.2%)
$0.00
Why?

6.2% × wages inside the wage base.

5. Medicare tax (1.45%)
$0.00
Why?

1.45% × all cash wages. Medicare is never capped by the Social Security wage base.

6. Additional Medicare Tax (0.9%)
Not available
Why?

0.9% on the amount above the threshold for your filing status, counting other income first. Without a filing status the threshold is unknown, so nothing is assumed.

7. Employee payroll tax
$0.00
Why?

Social Security + Medicare + Additional Medicare Tax when known.

8. Employer-paid benefit value
$0.00
Why?

Value to you, not cash paid to you. Monthly amounts shown × 12.

9. Costs you pay
$0.00
Why?

Your health premium × 12 plus other annual work costs, each counted once.

10. Paid time off illustration
$0.00
Why?

0 paid days × a standard workday × your hourly equivalent. Already inside your salary — never added to cash.

11. Value before federal income tax
$0.00
Why?

Cash wages − payroll tax − your costs. This is the primary figure and does not need a filing status.

12. Value before federal income tax, including benefits
$0.00
Why?

Row 11 + employer-paid benefit value, which is shown separately from cash on purpose.

13. Value per hour before federal income tax
$0.00
Why?

Row 12 ÷ hours worked per year.

14. Optional: approximate federal income tax
Not available
Why?

Secondary estimate using the annual 2026 rate schedules, not withholding tables.

15. Optional: after federal income tax, including benefits
Not available
Why?

Row 12 − the optional federal estimate.

1099 results

1. Gross revenue
$0.00
Why?

Rate × billable hours × working weeks, or the revenue you entered.

2. Business costs you actually pay
$0.00
Why?

Expenses, liability insurance, accounting or software and other recurring costs, each counted once. These reduce your real money.

3. Net profit
$0.00
Why?

Revenue − business costs you actually pay.

4. Of those costs, the amount you expect to be deductible
$0.00
Why?

Only this amount is used for tax. PaycheckVista does not decide deductibility.

5. Profit used for tax
$0.00
Why?

Revenue − the deductible amount in row 4.

6. Net earnings subject to SE tax (92.35%)
$0.00
Why?

92.35% × row 5. Below $400 of net earnings, no self-employment tax applies.

7. Earnings inside the Social Security wage base
$0.00
Why?

Covered wages first, then other self-employment earnings, then this work. Nothing is counted twice.

8. Social Security part of SE tax (12.4%)
$0.00
Why?

12.4% × row 7.

9. Medicare part of SE tax (2.9%)
$0.00
Why?

2.9% × row 6, never capped.

10. Additional Medicare Tax (0.9%)
Not available
Why?

Shown only when a filing status is selected, because the threshold depends on it.

11. Self-employment tax
$0.00
12. Deductible employer-equivalent half
$0.00
Why?

Half of rows 8 and 9 only. Additional Medicare Tax is excluded, and this is an income adjustment, never a cash saving.

13. Health insurance you pay
$0.00
Why?

An economic cost. Whether it is deductible depends on your situation.

14. Retirement contribution
$0.00
Why?

Your own saving, shown separately and not subtracted as a tax deduction here.

15. Value before federal income tax
$0.00
Why?

Net profit − self-employment tax − health insurance you pay. This is the primary figure and does not need a filing status.

16. Value per billable hour before federal income tax
$0.00
Why?

Row 15 ÷ billable hours per year.

17. Time-adjusted value per hour worked
$0.00
Why?

Row 15 ÷ billable plus unpaid admin hours.

18. Optional: approximate federal income tax
Not available
Why?

Secondary estimate using the annual 2026 rate schedules.

19. Optional: after federal income tax
Not available
Why?

Row 15 − the optional federal estimate.

Comparison, before federal income tax

The primary comparison is before federal income tax, so it works without a filing status and without any assumption about your household.

Recurring difference, contractor minus employee
$0.00
Why?

Contractor value before federal income tax minus the employee value before federal income tax including employer-paid benefits. A positive number favours the contract arrangement on these entries alone.

First-year difference
$0.00
Why?

Counts the sign-on bonus and one-time setup costs once, in year one only.

Break-even contractor hourly rate
$0.00
Why?

The hourly rate at which the contract arrangement reaches the same before-federal-tax value as the employee arrangement including benefits. Bounded bisection over the same formulas shown on this page. Bounds $0 to $5000 per hour, stopping when the two values agree within $0.01 or after 200 halvings. When no rate inside the bounds reaches the target, a message is shown instead of a number.

Optional: after the simplified federal estimate

This simplified federal estimate does not prepare a tax return and may differ materially from actual tax.

Recurring difference after federal income tax
Not available
Why?

Shown only when a filing status is selected.

First-year difference after federal income tax
Not available
Break-even rate after federal income tax
Not available
Why?

A secondary figure. The before-tax rate above is the primary one.

Federal income tax is not estimated because no filing status was selected. The before-federal-tax comparison, payroll tax and self-employment tax are still shown.

Limitations

  • · Federal income tax is not estimated because no filing status was selected. The before-federal-tax comparison, payroll tax and self-employment tax are still shown.
  • · Additional Medicare Tax is not estimated because no filing status was selected. More information is required: the liability threshold depends on filing status and is never assumed to be Single.
  • · State and local income taxes are excluded. This version estimates federal amounts only.
  • · Business costs are shown as economic costs. PaycheckVista does not determine deductibility: only the amount you independently expect to treat as deductible is used in the simplified estimate.
  • · No amount is treated as pre-tax. This page has no plan, cafeteria-plan or contribution-limit information, so premiums and contributions are treated as economic amounts only.
  • · No qualified business income deduction, entity election, quarterly payment schedule or retirement contribution limit check.
  • · Not every cost entered is necessarily deductible, and this page does not decide that.

Not included in the federal estimate

Qualified Business Income deduction · Child and dependent credits · Earned Income Credit · Education credits · Itemized deductions · Self-employed health-insurance deduction · Self-employed retirement deductions · Capital gains · Other household income · Alternative Minimum Tax · Net Investment Income Tax · State and local taxes · Estimated-tax penalties · Other special taxes or credits

Leaving an item out does not mean an independent contractor or a W-2 employee is ineligible for it. It only means this page does not calculate it.

Self-prepared comparison. Figures are estimates you entered, for information only. Not tax, legal, accounting or classification advice.

Rounding and formulas

  • · Every calculation runs in full precision and each shown figure is rounded once, to cents.
  • · A shown total equals the shown parts, because totals add the already-rounded parts.
  • · Monthly amounts are annualised as × 12 and weekly amounts as × working weeks, visibly.
  • · Each amount you enter is counted exactly once, in one category.
  • · Break-even: Bounded bisection over the same formulas shown on this page. Bounds $0 to $5000 per hour, stopping when the two values agree within $0.01 or after 200 halvings. When no rate inside the bounds reaches the target, a message is shown instead of a number.

Official 2026 sources

Every rate, base, threshold and factor this page applies, with the official source it comes from. Only IRS, SSA and U.S. Department of Labor material is used.

Self-employment tax figures on this page are provisional for 2026: the rates and the 92.35% factor come from final IRS guidance, but the 2026 Schedule SE and its instructions were not confirmed as final non-draft documents during review. Final 2026 accuracy is not claimed for those figures.

Hours over 40?

Overtime Calculator

Comparing hourly employee work with contract work? Federal weekly overtime applies to the employee side only in the general framework this estimate uses; contractor arrangements are not covered by it.

Educational federal estimate only. It does not determine whether overtime is legally owed and does not guarantee that any wage figure is correct.

Filling out a Form W-4?

2026 W-4 Assistant

If you take the employee role, you will complete a Form W-4. The assistant explains each 2026 step, including what should not go in Step 4(a).

Calculations are estimates for informational purposes and are not tax, legal, or financial advice. Actual withholding and take-home pay may differ.