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
Your total annual base salary before taxes
Annual value of health cover paid by your employer
Employer’s annual contribution to your retirement fund
Paid vacation, sick days, and holiday weeks per year
Gym, meals, transit, education, or other perks
📋 1099 Contractor
Your contractor billing rate per hour
Average billable hours per week
Total weeks you’ll work (exclude vacation and sick time)
Tools, software, office space, and other operating costs
Annual cost of your own health insurance plan
Amount you’ll save for retirement annually
Better Option
💼 W-2 Salary by $17,734.40/year
W-2 Salary: Total Compensation
Salary + benefits + employer-paid taxes
$115,577.31
Take-home: $65,700.00
1099 Contractor: Gross Revenue
Total billed before taxes and expenses
$124,800.00
Take-home: $47,965.60
💡 Equivalent Hourly Rate
To match the total compensation of $115,577.31, you need to charge at least $60.20/hr as a contractor.
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FreshBooks
Invoicing and accounting software built for freelancers. #1 rated for ease of use.
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Track income, expenses, and mileage. Maximize tax deductions automatically.
Xero
Beautiful accounting software for small businesses and freelancers.
Wave
100% free invoicing and accounting. Perfect for solo freelancers.
Bonsai
Contracts, proposals, invoices, and accounting — all-in-one freelance suite.
Gusto
Payroll and benefits for freelancers who hire contractors or employees.
We may earn a commission if you sign up through these links, at no extra cost to you.
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?
What is the difference between 1099 and W-2?
Recommended Tools
FreshBooks
Invoicing and accounting software built for freelancers. #1 rated for ease of use.
QuickBooks Self-Employed
Track income, expenses, and mileage. Maximize tax deductions automatically.
Xero
Beautiful accounting software for small businesses and freelancers.
Wave
100% free invoicing and accounting. Perfect for solo freelancers.
Bonsai
Contracts, proposals, invoices, and accounting — all-in-one freelance suite.
Gusto
Payroll and benefits for freelancers who hire contractors or employees.
We may earn a commission if you sign up through these links, at no extra cost to you.
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