W-2 vs 1099 Tax Comparison Calculator
Compare take-home pay between W-2 employee and 1099 contractor status. See the real self-employment tax penalty nobody explains.
The hidden cost: At $100K income, 1099 contractors pay ~$6,480 more in self-employment tax than W-2 employees. That's real money out of your pocket.
W-2 vs 1099 Tax Comparison Calculator
Compare take-home pay as a W-2 travel nurse vs. 1099 independent contractor. See the real tax difference.
Income Details
Total compensation before taxes
1099 Deductions
Mileage, supplies, licensing, CEUs, etc.
1099: deductible. W-2: often employer-paid
401(k)/Solo 401(k) contribution
Side-by-Side Comparison
W-2 Wins by
$8,792
per year in take-home pay
| W-2 Employee | 1099 Contractor | |
|---|---|---|
| Gross Income | $100,000 | $100,000 |
| Business Expenses | N/A | -$10,000 |
| FICA / SE Tax | -$7,650 | -$13,770 |
| Federal Tax | -$12,521 | -$5,193 |
| State Tax (TX) | -$0 | -$0 |
| Total Tax | -$20,171 | -$18,963 |
| Net Take-Home | $79,829 | $71,037 |
| Effective Tax Rate | 20.2% | 19.0% |
The Self-Employment Tax Penalty
As a 1099 contractor, you pay both halves of Social Security and Medicare (15.3% total vs. 7.65% for W-2). At $100,000 gross income, this costs you an extra $6,120 per year.
1099 Break-Even Rate
To match W-2 take-home pay, a 1099 contract would need to pay $98,792 gross (-1.2% higher) to account for the SE tax penalty.
* Simplified calculation. Does not include employer-paid benefits (health insurance, PTO, etc.) that W-2 employees often receive. 1099 contractors must also pay quarterly estimated taxes. Consult a tax professional for personalized advice.
Key Considerations
W-2 Advantages
- • Employer pays half of FICA (7.65%)
- • Often includes health insurance
- • 401(k) with employer match
- • Simpler taxes (no quarterly payments)
- • Workers' comp and unemployment coverage
1099 Advantages
- • Business expense deductions
- • QBI deduction (up to 20% of income)
- • Higher Solo 401(k) limits
- • More control over schedule
- • Often higher gross rates
Quick Comparison: W-2 vs 1099 at $100K
| Category | W-2 Employee | 1099 Contractor |
|---|---|---|
| Gross Income | $100,000 | $100,000 |
| FICA / SE Tax Rate | 7.65% | 15.3% |
| FICA / SE Tax Amount | -$7,650 | -$14,130 |
| SE Tax Deduction (1099 only) | N/A | +$7,065 deduction |
| QBI Deduction (1099 only) | N/A | Up to 20% |
| Extra SE Tax Paid (1099) | — | $6,480 |
* Simplified comparison. 1099 can partially offset with QBI deduction and business expenses.
W-2 Employee Advantages
- ✓ Employer pays half of FICA (7.65% savings)
- ✓ Health insurance often provided
- ✓ 401(k) with employer match
- ✓ Workers' comp coverage
- ✓ Unemployment insurance eligibility
- ✓ Simpler taxes (no quarterly payments)
1099 Contractor Advantages
- ✓ Business expense deductions
- ✓ QBI deduction (up to 20% of income)
- ✓ Higher Solo 401(k) limits
- ✓ More schedule flexibility
- ✓ Often higher gross pay rates
- ✓ Health insurance premium deduction
Frequently Asked Questions
What is the main tax difference?
W-2 employees pay 7.65% FICA, while 1099 contractors pay 15.3% self-employment tax (both halves of Social Security + Medicare). This creates a ~$6,480 difference at $100K income.
How much more should 1099 pay?
At minimum, 1099 should pay 7.65% more to cover the extra SE tax. Factoring in lost benefits (health insurance, 401k match), most recommend 15-25% higher gross pay for 1099 to break even with W-2.
Can any travel nurse be 1099?
Legally, it depends on the working relationship. True 1099 contractors control their schedule and methods. Most travel nursing positions should be W-2 because the agency/facility controls the work. Misclassification carries penalties.
What about quarterly taxes?
1099 contractors must pay quarterly estimated taxes (Apr 15, Jun 15, Sep 15, Jan 15). Failing to pay quarterly can result in underpayment penalties. W-2 employees have taxes withheld automatically.
Understand Your Full Tax Picture
W-2 vs 1099 is just part of the equation. Calculate your full travel nurse pay including stipends, state taxes, and take-home pay.
Full Pay Calculator →