Rate calculator · 2026
What 1099 rate equals this W-2 salary?
Load a salary with employer taxes, benefits, workers’ compensation, and overhead—then convert the result into an annual or hourly contract rate.
- 2026 rules
- All 50 states + DC
- Free · no signup
A contractor billing at or below this costs no more than a $75,000 W-2 employee, fully loaded.
| Base salary | $75,000 |
| Employer payroll taxes | $6,023 |
| Workers' comp | $750 |
| Benefits | $10,050 |
| Overhead | $7,500 |
| Breakeven 1099 / year | $99,323 |
| ÷ 2,080 hours | $47.75/hr |
What the breakeven rate means
This is the 1099 rate where the employer's contract spend equals the employee's fully-loaded cost. Below it, the contractor costs less; above it, the W-2 employee costs less on the assumptions you entered.
Billable hours matter. A full-time year is 2,080 hours, but contractors often bill fewer after vacation, administration, and gaps between engagements.
Employer cost is only one perspective
This tool measures cost equivalence for the buyer. To compare what the worker keeps after federal taxes, use the 1099 versus W-2 tax calculator.
You can also model the original W-2 cost with the hiring cost calculator or review the broader W-2 versus 1099 decision analysis.
Common questions
Contractor rate FAQ
How do I convert a W-2 salary to a 1099 contractor rate?
Take the fully-loaded cost of the employee — base salary plus employer payroll taxes, workers' comp, benefits, and overhead — and divide by the billable hours in a year. That is the contract rate at which a contractor costs an employer the same as the employee.
What is the breakeven contractor rate?
It is the 1099 rate that equals the all-in W-2 cost. Below it, the contractor is cheaper for the employer; above it, the employee is cheaper. This is the inverse of the main hiring cost calculator.
How many billable hours are in a year?
A full-time year is about 2,080 hours (40 × 52). Contractors who bill fewer hours — after time off, admin, and gaps between projects — need a higher hourly rate to reach the same annual total, so adjust the hours input to your reality.
Does this include the contractor's own taxes?
No. This shows the employer's cost-equivalence. A contractor also pays self-employment tax and gets no benefits, so to take home what an employee does they must charge more still — see the 1099 vs W-2 tax calculator for the worker side.
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