Cost concepts
What is Breakeven contract rate?
The breakeven contract rate is the annual amount you could pay a 1099 contractor for the same work that would make the contractor cost exactly as much as the fully-loaded W-2 hire. Below that rate, the contractor is cheaper; above it, the employee is cheaper. It turns a vague "contractors cost more per hour" intuition into a precise number.
It is the honest way to compare the two options, because a contractor's higher rate often offsets the employer taxes and benefits you avoid. The comparison is about total cost, not headline pay.
Example
If a W-2 hire costs $99,000 fully loaded, then any 1099 contract above $99,000 a year makes the contractor the more expensive choice for the same work.