W-2 vs 1099: Employee vs Independent Contractor

Compare your take-home pay as a W-2 employee versus a 1099 contractor. As a 1099 contractor, you pay both the employee and employer share of FICA (15.3% self-employment tax), but can deduct business expenses and the employer-equivalent portion of SE tax.

• W-2 Employee: Employer pays half of FICA; benefits often included.
• 1099 Contractor: Pay full 15.3% SE tax; can deduct business expenses.
• Break-even: A 1099 rate typically needs to be 25-40% higher to match W-2 take-home.