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1099 Contractor Rate vs. W-2 Salary Converter

Convert a 1099 contractor rate to an equivalent W-2 salary by factoring in the self-employment tax burden, employer-paid benefits and PTO a salaried job would otherwise cover.

Contractor hourly rate ($)

Billable hours per week

Weeks worked per year Accounts for unpaid time off and gaps between contracts.

Monthly health insurance you pay yourself ($)

Employer 401(k) match you'd get as a W-2 employee (%)

Extra paid holidays/PTO days a W-2 job would give you (days)

Equivalent W-2 salary

—

Equivalent to — /hr on a W-2 basis, paid across all 52 weeks.

Metric	Value

How it works

This tool converts a 1099 contract rate into an equivalent W-2 salary. It starts from your annual contract gross (hourly rate × billable hours per week × weeks worked per year), then subtracts the extra 7.65% employer-side FICA/Medicare that a W-2 employer would normally pay on your behalf, the health insurance you fund yourself, and the value of the employer retirement match you would have received as an employee. The value of PTO a W-2 job would add is shown separately for reference — it is not subtracted, since the "weeks worked per year" figure already reflects unpaid time between contracts.

The equivalent W-2 hourly rate spreads the resulting salary across all 52 weeks of the year (hours per week × 52), since salaried pay — unlike contract billing — continues through holidays and time off.

This is general information to help you compare offers, not tax or financial advice. Actual tax liability depends on your filing status, state of residence, itemized vs. standard deductions, and eligibility for the Qualified Business Income (QBI) deduction. Consult a qualified tax professional or CPA for your specific situation.

How it works

This converts a 1099 contract rate into the W-2 salary that would leave you equally well off. Annual contract gross is hourly rate × billable hours per week × weeks worked per year. From that it subtracts three things a W-2 employer would otherwise cover: the extra 7.65% employer-side FICA and Medicare, twelve months of the health premium you fund yourself, and the employer retirement match you forfeit, taken as a percentage of gross. What remains is the equivalent salary.

Weeks worked per year is the input people set too high. The default of 48 already accounts for unpaid gaps between contracts and time off, and the field caps at 52. Other defaults are 75 an hour, 35 billable hours a week, 500 a month for health cover, a 4% 401(k) match and 15 PTO days. The equivalent hourly figure divides the resulting salary by hours × 52, because salaried pay continues through holidays.

The PTO days field is informational only: its dollar value, days × rate × 8, appears in the table but is never subtracted, since the weeks-worked figure already reflects unpaid time. The 7.65% is applied flat to all gross, so it ignores the Social Security wage base cap, the fact that self-employment tax applies to 92.35% of net earnings, the QBI deduction, state taxes and deductible business expenses. The page states this is general information, not tax advice.

Frequently asked questions

What contractor rate is equivalent to a six-figure salary?

Work backwards from the defaults. At 35 hours a week over 48 weeks, a 75 rate produces 126,000 gross, which after 7.65% self-employment tax, 6,000 of health cover and a 4% match lands at roughly 105,321 equivalent. Raise the rate until the headline hits your target.

Why does it use 7.65% and not 15.3% for self-employment tax?

Because only half of FICA is extra. A W-2 employee pays 7.65% and the employer pays a matching 7.65%; as a contractor you cover both halves. The tool subtracts only the employer half, since that is the portion a salaried job would have absorbed on your behalf.

Does the equivalent hourly rate use my weeks worked figure?

No, it deliberately divides the equivalent salary by hours per week × 52. Salaried pay continues through holidays and quiet periods, so spreading it across the full year is the fair comparison. Your annual contract gross still uses the weeks-worked number you entered.

Should paid time off be part of the comparison?

The tool shows the value of PTO, calculated as days × rate × 8 hours, but does not subtract it, to avoid double-counting unpaid time already captured by weeks worked per year. If you set weeks to 52, consider subtracting that PTO figure yourself.

Are federal and state income taxes included?

Neither is modelled. The tool covers only the employer-side payroll tax difference, plus benefits and retirement match. Income tax broadly applies to both employment types so it largely cancels out, but your state, filing status and QBI eligibility can still shift the comparison.

Also known as

1099 to w2 calculatorcontractor rate vs salaryw2 equivalent hourly ratecontract to salary converter

1099 Contractor Rate vs. W-2 Salary Converter

How it works

Frequently asked questions

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