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Contractor Rate Calculator
Contractor hourly rate equivalent to employee salary (W-2 vs 1099).
Enter values to see your result
Frequently asked questions
W-2 vs 1099 — key differences?
W-2: employer withholds tax, provides benefits, offers unemployment insurance. 1099: you invoice, handle own taxes, no benefits, but more deductions and flexibility.
Is the 1099 rate always better?
Financially, often yes if correctly priced. Lifestyle: inconsistent, no employer-sponsored benefits, must manage cash flow. Best for specialized skills with strong demand.
What about SE tax deduction?
Half of SE tax is deductible on 1040. Contractors can also deduct home office, equipment, mileage — reducing effective tax rate below W-2 employees in some cases.
How do benefits weigh in?
A solid employer package (health, 401(k) match, 15 PTO days, bonus) can be worth 30–40% of salary. Contract rate must cover all of these for apples-to-apples comparison.