Rate calculator · 2026
What 1099 rate equals this W-2 salary?
Enter a W-2 base salary and state. This returns the equivalent 1099 contractor rate — hourly and annual — by loading the salary with employer payroll taxes, workers' comp, benefits, and overhead, then spreading it across your billable hours.
This is the breakeven: a contractor billing at or below this rate costs no more than the employee. It is the inverse of the hiring cost calculator. For the worker's side of the math, use the 1099 vs W-2 tax calculator, and read which is actually cheaper.
Equivalent 1099 rateTexas
/hr
$99,323/yr1.32× base salary
A contractor billing at or below this costs no more than a $75,000 W-2 employee, fully loaded.
W-2 base salary
$75,000
Equivalent 1099
$99,323/yr
$
$
%
%
| 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 |
Employer cost-equivalence · IRS Pub 15Full calculator
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.