Contractor vs Salary Comparison

Compare contractor (1099) compensation to full-time salary (W-2). See the real difference after taxes and benefits.

💼 W-2 Salary

Annual Salary

Employer Health Insurance

401k Employer Match

PTO Weeks

Other Benefits Value

📋 1099 Contractor

Hourly Rate

Hours / Week

Weeks Worked / Year

Annual Business Expenses

Health Insurance Cost

Retirement Contribution

Better Option

💼 Salary by $8,609.68/year

Salary: Total Compensation

$115,577.31

Take-home: $65,700.00

Contractor: Gross Revenue

$124,800.00

Take-home: $57,090.32

💡 Equivalent Hourly Rate

To match the total salary compensation of $115,577.31, you need to charge at least $60.20/hr as a contractor.

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Making an Informed Decision

When comparing a $120,000 contractor rate to a $90,000 salary, the salary might actually be worth more after accounting for employer-paid benefits (health insurance ~$7,000, 401k match ~$4,500, payroll taxes ~$6,900, PTO ~$5,000). Our calculator factors in all of these hidden values.

Frequently Asked Questions

How much more should a contractor make than a salaried employee?

A common rule of thumb is that contractors should earn 25–40% more than the equivalent salary to cover self-employment tax, health insurance, retirement contributions, and lack of paid time off. Our calculator computes the exact difference for your situation.

What is the difference between 1099 and W-2?

W-2 employees have taxes withheld by their employer, receive benefits, and the employer pays half of Social Security/Medicare. 1099 contractors pay their own taxes, provide their own benefits, and pay the full 15.3% self-employment tax.