W-2 to 1099 Rate Calculator

Convert a W-2 hourly rate to an equivalent 1099 contractor rate, with employer FICA, benefits, unpaid time off and billable hours as editable assumptions.

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How do you convert a W-2 hourly rate to a 1099 rate?

Total the W-2 job's yearly value — pay, the employer's 7.65% FICA, retirement match and benefits — add your business costs, and divide by the hours you can bill after unpaid time off. With typical assumptions, $50 W-2 is about $74 an hour 1099.

Cost: Free, no limits
Upload: None — runs on your device
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Works offline: Yes, once loaded

How to convert a W-2 hourly rate to 1099

Enter the W-2 rate and hours
The hourly rate and paid hours per week of the job you are comparing.
Adjust the benefits
Paid days off, employer-paid benefits and the retirement match. The defaults are starting points, not facts about any job.
Set the contractor assumptions
Employer FICA (7.65% by default), the share of hours you can bill, and your yearly business costs.
Read the rate and its breakdown
The equivalent 1099 rate, the multiplier over the W-2 rate, and every line it was built from.

Examples

$50/h, defaults (40 h, 20 days off, $6,000 benefits, 3% match, 85% billable)≈ $74.19/h (1.48×)
$121,076 ÷ 1,632 billable hours.
$30/h, same defaults≈ $45.98/h (1.53×)
Fixed-cost benefits weigh more on a lower rate.
$40/h, no benefits, no days off, 100% billable$43.06/h (7.65% more)
Only the employer's FICA share is added.

Key features of the W-2 to 1099 Rate Calculator

Equivalent 1099 hourly rate and its multiplier over the W-2 rate
Employer FICA share, defaulting to 7.65% and editable
Benefits, retirement match and paid days off the contractor gives up
Billable share of hours and yearly business costs
Line-by-line breakdown of the annual amount and the billable hours
Reset to the default assumptions in one click

What it calculates

Inputs

W-2 hourly rate
Hours per week
Paid days off
Benefits per year
Retirement match %
Employer FICA %
Billable share %
Business costs per year

Results

Equivalent 1099 hourly rate
Multiplier over the W-2 rate
Annual amount and billable hours

Scope

United States
Estimate, not tax advice

When should you use this?

Comparing a contract offer with a salaried or hourly job.
Setting a freelance hourly rate that matches what you earn as an employee.
Seeing which assumption — benefits, time off or billable hours — moves the contractor rate most.

Limitations

US only, and an estimate: income tax, state taxes and business structure are not modelled.
It adds a flat employer FICA percentage. The real self-employment tax calculation (on 92.35% of earnings, half deductible) is slightly lower, and Social Security tax stops at an annual wage base.
Bonuses, equity, overtime pay and employer-paid training are not included unless you add their value to benefits.
Paid days off are converted to weeks at five working days a week.

Troubleshooting

It says the billable share must be more than 0% and at most 100%

Enter a percentage such as 85, not a decimal such as 0.85.

The rate looks very high

Check paid days off (days, not hours) and the benefits figure (dollars per year, not per month).

Common mistakes to avoid

Comparing the hourly numbers directly, as if the W-2 benefits and the employer's FICA share were worth nothing.
Assuming every working hour is billable. Contractors spend time on admin, sales and gaps between projects.
Forgetting costs an employer used to pay: equipment, software, insurance and accounting.

Pro tips

Tips for better results

Benefits
Use the real benefits statement, not a guess
Use the employer's actual benefits statement for the benefits figure — health premiums vary by thousands of dollars.
Billable time
The billable share moves the rate most
Be honest about billable hours: a lower billable share raises the rate more than almost any other assumption.
Short contracts
Account for gaps between contracts
Run the numbers for the contract's length, too: a short contract with a gap after it lowers your billable share for the year.

Why a 1099 rate has to be higher

A W-2 employee's cost to the employer is more than the hourly rate. The employer pays its half of FICA — 6.2% Social Security and 1.45% Medicare, 7.65% in all — and usually health insurance, a retirement match and paid days off. A 1099 contractor gets none of that and pays both halves of Social Security and Medicare themselves as self-employment tax. A contractor also only earns for the hours they can bill: time spent on admin, finding work and waiting between contracts is unpaid.

How this calculator works it out

It adds up the annual value of the W-2 job: pay (rate × hours per week × 52, since paid days off are paid), the employer's FICA share, the retirement match and the benefits you enter. It adds any business costs you will carry as a contractor. Then it divides the total by the hours you can bill: 52 weeks minus your paid days off (at five days a week), times hours per week, times your billable share. With the defaults — a $50 rate, 40 hours, 20 days off, $6,000 of benefits, a 3% match and 85% billable — the equivalent is about $74.19 an hour, 1.48 times the W-2 rate.

Self-employment tax, more precisely

Self-employment tax is 15.3% (12.4% Social Security plus 2.9% Medicare), charged on 92.35% of net self-employment earnings, and half of it is deductible for income tax. Those adjustments make the true extra cost slightly less than the flat 7.65% this calculator adds, so the result errs a little high. Social Security tax also stops at an annual wage base, so above it the employer's share — and your self-employment tax — is smaller. Income tax, state taxes, unemployment insurance, bonuses and equity are not modelled.

This is a US-only estimate for comparing offers, not tax advice. A tax professional can apply it to your situation.

Sources

Privacy

The W-2 to 1099 Rate Calculator runs entirely in your browser. What you enter and the result it produces stay on your own device — nothing is sent anywhere, because nothing needs to be.

You can confirm this rather than take our word for it: open your browser’s developer tools, watch the Network tab, and use the tool. No request carries your input. It also keeps working with the connection off.

Details are in the privacy policy.

What next?

For comparing two offers as a percentage difference.

Work out a percentage

W-2 to 1099 Rate Calculator — questions

How do I convert a W-2 hourly rate to 1099?

Add up what the W-2 job is worth in a year — pay, the employer's 7.65% FICA, benefits and retirement match — add your business costs, and divide by the hours you can actually bill. With this calculator's defaults, $50 an hour W-2 is about $74.19 an hour 1099.

What is a good rule of thumb for a contractor rate?

There is no single multiplier: it depends on benefits, time off and how many hours you can bill. With only the employer's FICA added, the uplift is 7.65%; with typical benefits, paid time off and 85% billable time it comes out near 1.5×.

Do 1099 contractors pay self-employment tax?

Yes. Contractors pay 15.3% self-employment tax — both the employee and employer halves of Social Security and Medicare — on 92.35% of net earnings, and can deduct half of it for income tax.

What counts as benefits?

What the employer pays that you would otherwise pay yourself: health, dental and vision premiums, life and disability insurance, and similar. The retirement match has its own field because it scales with pay.

Is this tax advice?

No. It is a US-only estimate built on the assumptions shown, for comparing offers. Your actual tax depends on your income, state, deductions and business structure.

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