1099 vs W-2: The Real Tax Difference
Published June 2026 · 5 min read
A $100,000 salary as a W-2 employee feels very different from a $100,000 1099 contract. The reason: self-employment tax. As a W-2, you pay 7.65% in FICA and your employer matches it. As a 1099, you pay both halves — 15.3%. That is an instant $7,650 difference on $100,000.
The Math at $100,000
| W-2 | 1099 | |
|---|---|---|
| FICA / SE Tax | -$7,650 | -$15,300 |
| Federal Tax (est) | -$12,000 | -$10,500* |
| Take-Home | ~$80,350 | ~$74,200 |
*1099 allows deductions (home office, equipment, health insurance) that reduce taxable income.
The 20-30% Rule
When negotiating a 1099 rate, ask for 20-30% more than the equivalent W-2 salary. This covers the extra 7.65% SE tax, the lack of employer benefits (health insurance, 401k match, PTO), and the added tax complexity. Use our 1099 Tax Calculator to run your specific numbers.