What 1099 hourly rate matches your W-2 pay?

Updated October 25, 2026

A $100-an-hour 1099 offer sounds like a raise over a $70-an-hour W-2 job. It can still pay less once you count taxes, benefits, work costs, and the hours you are actually paid. Here is how to find the 1099 rate that makes the two jobs worth the same.

The short answer

Compare the whole year, not the hourly rate.
W-2 side: your pay, minus your share of Social Security and Medicare tax, plus the benefits your employer pays for.
1099 side: your pay for the hours you are really paid, minus your work costs, minus self-employment tax.
The 1099 rate that makes both totals equal is your break-even rate.

Why the hourly rate misleads

On a W-2 job, your employer pays half of your Social Security and Medicare tax. Many employers also pay for part of your health insurance and retirement savings, and some pay for time off.

On a 1099 contract, you pay both halves of those taxes yourself, you buy your own insurance, and you cover your own work costs. License fees and malpractice coverage are common examples. A week you do not work is a week you are not paid. A higher rate has to cover all of that before it is really a raise.

The method in four steps

Value the W-2 job. Take your yearly pay. Subtract the Social Security and Medicare tax you pay (6.2% for Social Security, up to a yearly limit, plus 1.45% for Medicare). Add what your employer pays for health insurance and retirement.
Count the 1099 hours you will really be paid. Shifts per month times hours per shift times months. Do not assume 52 weeks.
Value the 1099 job. Rate times paid hours, minus your work costs, minus self-employment tax.
Find the break-even rate. Raise or lower the 1099 rate until step 3 equals step 1.

Both totals here are before income tax. Income tax applies to both jobs and depends on your whole situation, so leaving it out keeps the comparison simple.

A worked example (made-up numbers)

W-2 job
Pay: $70 an hour x 40 hours x 52 weeks	$145,600
Minus your Social Security and Medicare tax	−$11,138
Plus health, dental and vision paid by your employer ($1,000 a month)	+$12,000
Plus retirement money from your employer	+$4,000
Worth about	$150,462

1099 job
Pay: $100 an hour x 1,656 paid hours (11.5 shifts a month x 12 hours x 12 months)	$165,600
Minus work costs you pay yourself	−$6,000
Minus self-employment tax	−$22,551
Worth about	$137,049

The W-2 job is worth $13,413 more per year, even though the 1099 hourly rate is $30 higher.

To make the 1099 job worth the same, the rate has to rise to about $109.43 an hour. The free calculator rounds that up to $110. To leave a cushion for surprises, add 5% and round up to the next $5, which gives $115. That is a possible rate to ask for, not a promise of what any employer will pay. Your numbers will differ.

What can change the answer

Benefits. If your W-2 job pays for little insurance or retirement, the W-2 side shrinks. If it pays for a lot, it grows.
Paid hours. Fewer paid weeks on the 1099 side means a higher break-even rate. See what unpaid time really costs.
Work costs. License fees, malpractice coverage and similar costs lower the 1099 side.
The Social Security limit. Self-employment tax is lower once your earnings pass it. See how the limit works.
Not included: state and local tax, and your own income tax bracket.

Adding 1099 shifts next to a W-2 job

If you keep your W-2 job, you keep its benefits. The better question is how much the extra work adds to your year. The calculator's side-gig option answers it. It takes your 1099 pay, subtracts your work costs and the Social Security and Medicare tax on that income, and shows about what the side work could add in a year. Your W-2 pay may already use up part of the Social Security limit, which lowers the tax on the side income.

Try it with your own numbers

The free calculator finds your break-even rate in about two minutes. No sign-up. What you type stays in your browser.

Open the free calculator

Sources

Scrubs & Fine Print gives educational information only, not personal tax, legal or financial advice. Rules, limits and dates change, and your situation may differ. Examples use made-up numbers. Check with a CPA or a lawyer before you decide. Figures are for tax year 2026.