Which pays more tax, 1099 or W-2?

Generally, 1099 freelancers pay more tax due to self-employment tax, but they can deduct expenses. W-2 employees pay less but have fewer write-offs.

What taxes does a 1099 contractor pay?

1099 workers pay self-employment tax (15.3%) plus federal and possibly state income taxes.

Is this calculator accurate for freelancers in 2026?

Yes, this calculator uses 2026 estimates for federal tax brackets and self-employment rates in the USA.

Can freelancers deduct expenses from 1099 income?

Yes, freelancers can deduct qualified business expenses, which lowers taxable income and may reduce total tax liability.

Does this calculator include Social Security and Medicare?

Yes, it includes self-employment tax for 1099 income (covering Social Security and Medicare), and employee FICA for W-2 income.

1099 vs W-2 Tax Calculator 2026 – Compare Take-Home Pay

This calculator compares your take-home pay as a 1099 contractor versus a W-2 employee, factoring in self-employment tax (15.3%) and the employer half of FICA that contractors pay themselves. Updated June 2026.

2026 Tax Estimator – 1099 vs W-2

1099 vs W-2 tax calculator for freelancers and employees in 2026

How it Works

This tool compares taxes for self-employed individuals (1099) and regular employees (W-2). For 1099 income, we include self-employment tax (~15.3%) and income tax (~24%). For W-2, we assume standard FICA (7.65%) and income tax (~22%).

Example

If you earn $60,000/year:

1099: ~$23,580 in total taxes
W-2: ~$17,190 in total taxes

FAQ

Is 1099 always worse? Not necessarily. You may deduct expenses as a freelancer, which can lower your taxes.
Does this include state tax? No, this version only estimates federal taxes.
What is self-employment tax? It covers Social Security and Medicare (15.3%) that employers normally split with employees.

1099 vs W-2: Which Pays More Taxes in 2026?

Freelancers and gig workers (1099) often face higher tax burdens due to the 15.3% self-employment tax, which covers both Social Security and Medicare. In contrast, W-2 employees split those contributions with their employers and benefit from automatic payroll withholding.

In 2026, tax brackets have shifted slightly, but self-employed individuals are still responsible for the full SE tax, in addition to federal income tax. That means a $60,000 income as a freelancer could result in over $23,000 in taxes, while the same income under W-2 status may result in about $17,000 in total taxes.

This calculator helps you understand the key tax differences based on your income. It's ideal for freelancers, independent contractors, Uber drivers, Etsy sellers, and anyone in the gig economy who wants to compare real tax outcomes before making a decision.

Keep in mind that while 1099 income may appear worse at first, freelancers can deduct business expenses—such as internet, home office, travel, and equipment—which reduces taxable income and helps balance out the tax burden.

👉 Also try our Freelancer Tax Calculator.