Find out exactly how much more you'll pay in self-employment tax as a 1099 contractor versus a W-2 employee. Side-by-side breakdown including federal, state, and FICA taxes for all 50 states.
Enter your income, filing status, and state to see a detailed side-by-side breakdown of 1099 vs W-2 taxes.
A W-2 employee has taxes withheld by their employer, who also pays half of FICA taxes (7.65%). A 1099 contractor is self-employed and must pay the full 15.3% self-employment tax — both the employee and employer portions of Social Security (12.4%) and Medicare (2.9%). However, 1099 contractors can deduct half of SE tax when calculating adjusted gross income.
1099 contractors typically pay about 7.65% more in self-employment taxes compared to W-2 employees on the same gross income. This is because they cover both the employee and employer portions of FICA. However, the deductible half of SE tax and available business expense deductions can partially offset this burden.
The self-employment tax rate for 2024 is 15.3%, consisting of 12.4% for Social Security (on the first $168,600 of net self-employment earnings) and 2.9% for Medicare (on all net earnings). An additional 0.9% Medicare tax applies to earnings above $200,000 ($250,000 for married filing jointly).
Yes! 1099 contractors can deduct legitimate business expenses on Schedule C, including home office costs, equipment and supplies, vehicle mileage, travel, health insurance premiums, retirement contributions (SEP IRA, Solo 401k), software subscriptions, and professional development. These deductions can significantly reduce taxable income compared to W-2 employees.
The choice depends on many factors beyond taxes: job security, benefits (health insurance, retirement matching, paid leave), schedule flexibility, and career goals. While 1099 work offers business deductions and autonomy, W-2 employment provides stability, benefits, and simpler tax filing. Use our calculator to compare the pure tax difference, then factor in the full picture of your financial situation.
Yes! Our calculator includes state income tax estimates for all 50 states plus DC. States like California, New York, and Oregon have high income taxes, while states like Texas, Florida, and Washington have no state income tax. Select your state to see the complete picture. We also have dedicated state pages with specific rates and brackets.
The Qualified Business Income (QBI) deduction allows eligible self-employed taxpayers to deduct up to 20% of qualified business income from their taxable income. This can substantially reduce the federal tax burden for 1099 contractors. Note: our calculator provides a baseline comparison and does not yet include QBI, which depends on your specific business type and total income.