| Gross Annual Salary | $0 |
| − FICA (SS + Medicare 7.65%) | −$0 |
| − Federal Income Tax (2024 brackets) | −$0 |
| − State Income Tax | −$0 |
| = Net Take-Home Pay | $0 |
| + Employer Benefits Value | +$0 |
| = Total W2 Compensation Value | $0 |
| Gross Contract Revenue | $0 |
| − Business Expenses | −$0 |
| = Net Self-Employment Earnings | $0 |
| − Self-Employment Tax (15.3% on 92.35%) | −$0 |
| − Federal Income Tax (after SE deduction) | −$0 |
| − State Income Tax | −$0 |
| = Net Take-Home Pay | $0 |
| True Hourly Equivalent (after all taxes + expenses) | $0/hr |
🎁 Benefits Gap Analysis
Your W2 benefits are worth approximately $0/year: health insurance ($0), PTO value ($0), and 401k match ($0). As a 1099 contractor you fund these yourself — factor this into your rate negotiation.
As a W2 employee, your employer pays half of your FICA taxes (7.65%). As a 1099 contractor, you pay both halves — 15.3% total on 92.35% of your net earnings. This is the single largest financial shock for new contractors. The good news: you can deduct 50% of SE tax from your federal taxable income.
Formula: SE Tax = Net Earnings × 92.35% × 15.3%
Deduction: 50% of SE Tax reduces your federal taxable income.
Save More on Your 1099 Taxes — Free Spreadsheet Included
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