2026 federal comparison
1099 vs. W-2 take-home calculator
Compare estimated 2026 federal take-home pay on a W-2 wage and on 1099 / self-employment net profit. See how much 1099 profit it would take to match the W-2 result, using current IRS rates.
How this comparison is figured
- W-2 take-home = wages − employee Social Security tax (6.2% up to the $184,500 wage base) − employee Medicare tax (1.45%) − Additional Medicare Tax if wages exceed the threshold − estimated federal income tax on wages after the 2026 basic standard deduction.
- 1099 take-home = net profit − self-employment tax − Additional Medicare Tax if it applies − estimated federal income tax. SE tax is 12.4% Social Security plus 2.9% Medicare on 92.35% of net profit. Half of the SE tax (not including Additional Medicare Tax) is deducted when figuring income tax.
- The “profit to match” figure is the 1099 net profit whose estimated take-home equals W-2 take-home plus any benefits amount you entered.
- Employer FICA is the matching 6.2% Social Security and 1.45% Medicare amounts on the W-2 wage. It is a cost to the employer, not a deduction from the employee’s paycheck. Unemployment tax and benefits administration are not included.
2026 standard deduction used here
| Filing status | Basic standard deduction |
|---|---|
| Single | $16,100 |
| Married filing jointly | $32,200 |
| Married filing separately | $16,100 |
| Head of household | $24,150 |
Official IRS sources
- Self-employment tax (Social Security and Medicare taxes) — 15.3% rate, 2026 wage base of $184,500, the employer-equivalent deduction, and Additional Medicare Tax thresholds.
- Topic No. 751, Social Security and Medicare withholding rates — employee 6.2% and 1.45% shares.
- Revenue Procedure 2025-32 (PDF) — official 2026 income-tax rate tables and standard deduction amounts.
- Topic No. 560, Additional Medicare Tax.
If you go the 1099 route, keep a clean year of records
The 1099 Freelancer Tax Tracker ($12) is a spreadsheet for logging 1099 income and expenses and planning quarterly payments. This page is only a one-time comparison.
Related calculators
Frequently asked questions
Why is take-home lower on 1099 income than on the same W-2 wage?
A W-2 employee pays a 6.2% Social Security tax and a 1.45% Medicare tax (the employee share of FICA), and the employer pays a matching amount that does not come out of the paycheck. A self-employed person pays both shares as self-employment tax: 12.4% Social Security plus 2.9% Medicare on 92.35% of net profit, which is a 15.3% rate on net earnings. You can deduct half of that SE tax when figuring adjusted gross income, which slightly reduces income tax, but the combined federal tax is still usually higher on the 1099 side for the same dollar amount. This page is an estimate, not tax advice.
Which 2026 figures does this use?
The Social Security wage base is $184,500. Additional Medicare Tax is 0.9% above $200,000 (single or head of household), $250,000 (married filing jointly), or $125,000 (married filing separately). Federal income tax uses the 2026 basic standard deduction and rate tables in Rev. Proc. 2025-32. Self-employment tax follows the IRS self-employment tax page and Form 1040-ES. The same methods are used on the SE tax calculator.
What is left out of this comparison?
State and local tax, the qualified business income deduction, tax credits, itemized deductions, pre-tax 401(k) or cafeteria-plan contributions, self-employed health insurance and retirement-plan deductions, unemployment tax, and any special rule that applies to your facts. It also does not value job security, overtime rules, or benefits except the optional benefits amount you enter.
What should I enter for W-2 benefits?
Optionally enter the annual value of benefits you would lose as a 1099 contractor, such as employer-paid health insurance. The “1099 net profit to match” figure then aims for W-2 take-home plus that benefits amount, because you would have to cover those costs yourself. Leave it at zero if you want a tax-only comparison.
Does the employer FICA line mean a company should always hire 1099 contractors?
No. Employer Social Security and Medicare taxes are a real extra cost of W-2 wages, and this line shows that amount (the 6.2% and 1.45% employer shares, subject to the 2026 wage base). Worker classification is a legal question, not a tax-minimization choice. Misclassifying an employee as a contractor can lead to back taxes and penalties. This calculator does not tell you how a worker should be classified.
Is the “1099 net profit to match” a billing rate?
It is an estimated net profit (after business expenses) that leaves about the same federal take-home as the W-2 wage, plus any benefits amount you entered. Your invoice rate still has to cover expenses, unpaid time, and profit on top of that net profit. The freelance rate calculator can help turn a profit goal into an hourly rate.