W-2 vs 1099 test cases (2026): inputs, steps and results
Short answer: Eight worked examples of the 2026 W-2 vs 1099 calculation, from a $50,000 salary to a $250,000 service-business contractor and a loss year. Each lists every input and every step (FICA, self-employment tax, QBI, federal and state tax), so you can re-run it in the calculator or re-compute it by hand. All numbers are generated by the same tax engine as the calculator.
Shared assumptions unless a case says otherwise: 40 hours a week, 48 weeks available, 15 paid-time-off days (paid on the W-2 job, unpaid as a contractor, so 1,800 billable hours), employer health premium $550/month, 4% 401(k) match, $480/month self-paid health insurance, no business expenses, not a specified service business. W-2 take-home is salary minus FICA, federal and state income tax; "total value" adds the employer health premium and 401(k) match. Formulas and sources are on the methodology page. Download all cases as JSON.
| Case | Break-even 1099 rate | W-2 take-home | 1099 take-home |
|---|---|---|---|
| $50,000 salary, single, Texas | $39.26/hr | $42,355 | $49,219 |
| $100,000 salary, single, California (calculator default) | $69.89/hr | $74,110 | $79,360 |
| $100,000 salary, single, Texas | $69.06/hr | $79,180 | $90,963 |
| $100,000 salary, married filing jointly, Texas | $69.99/hr | $84,710 | $95,335 |
| $200,000 salary, single, New York, specified service business | $126.84/hr | $138,167 | $156,853 |
| $250,000 salary, single, Texas, specified service business | $159.45/hr | $183,182 | $200,230 |
| $240,000 net 1099 profit, single, Texas | $137.61/hr | $148,927 | $173,072 |
| 1099 expenses larger than income, single, Texas | $48.26/hr | $50,390 | $0 |
Take-home columns compare each case at the 1099 income entered in that case (listed under its inputs), not at the break-even rate.
$50,000 salary, single, Texas
What it checks: Low income: full QBI deduction, no Additional Medicare, no wage-base cap.
Inputs: W-2 salary $50,000; 1099 rate $38.00/hr × 1,800 billable hours; business expenses $0; filing status SINGLE; state Texas; not a specified service business; self-paid health $480/month. Open in calculator.
| W-2 step | Amount |
|---|---|
| Salary | $50,000.00 |
| Social Security 6.2% (up to $184,500) | $3,100.00 |
| Medicare 1.45% | $725.00 |
| Additional Medicare 0.9% (above threshold) | $0.00 |
| Taxable income (salary − $16,100 standard deduction) | $33,900.00 |
| Federal income tax | $3,820.00 |
| State income tax | $0.00 |
| Take-home | $42,355.00 |
| Employer health + 401(k) match | $8,600.00 |
| Total value | $50,955.00 |
| 1099 step | Amount |
|---|---|
| Gross 1099 income | $68,400.00 |
| Business expenses | $0.00 |
| Net profit (floored at $0) | $68,400.00 |
| SE tax base (92.35% of profit) | $63,167.40 |
| Social Security part 12.4% (up to $184,500) | $7,832.76 |
| Medicare part 2.9% | $1,831.85 |
| Self-employment tax | $9,664.61 |
| Deduction: half of SE tax | $4,832.31 |
| Deduction: self-employed health insurance | $5,760.00 |
| Adjusted gross income | $57,807.70 |
| Standard deduction | $16,100.00 |
| QBI deduction (Section 199A) | $8,341.54 |
| Taxable income | $33,366.16 |
| Federal income tax (brackets) | $3,755.94 |
| Additional Medicare 0.9% on SE income (above threshold) | $0.00 |
| State income tax | $0.00 |
| Total tax (SE + federal + state) | $13,420.55 |
| Health insurance paid | $5,760.00 |
| Take-home | $49,219.45 |
Result: the 1099 rate that matches this W-2 offer is $39.26/hr. At the 1099 income above, the contract is behind the job by $1,736 a year after counting W-2 benefits.
$100,000 salary, single, California (calculator default)
What it checks: The exact numbers the home page shows on load, plus California income tax.
Inputs: W-2 salary $100,000; 1099 rate $65.00/hr × 1,800 billable hours; business expenses $0; filing status SINGLE; state California; not a specified service business; self-paid health $480/month. Open in calculator.
| W-2 step | Amount |
|---|---|
| Salary | $100,000.00 |
| Social Security 6.2% (up to $184,500) | $6,200.00 |
| Medicare 1.45% | $1,450.00 |
| Additional Medicare 0.9% (above threshold) | $0.00 |
| Taxable income (salary − $16,100 standard deduction) | $83,900.00 |
| Federal income tax | $13,170.00 |
| State income tax | $5,070.42 |
| Take-home | $74,109.58 |
| Employer health + 401(k) match | $10,600.00 |
| Total value | $84,709.58 |
| 1099 step | Amount |
|---|---|
| Gross 1099 income | $117,000.00 |
| Business expenses | $0.00 |
| Net profit (floored at $0) | $117,000.00 |
| SE tax base (92.35% of profit) | $108,049.50 |
| Social Security part 12.4% (up to $184,500) | $13,398.14 |
| Medicare part 2.9% | $3,133.44 |
| Self-employment tax | $16,531.57 |
| Deduction: half of SE tax | $8,265.79 |
| Deduction: self-employed health insurance | $5,760.00 |
| Adjusted gross income | $102,974.22 |
| Standard deduction | $16,100.00 |
| QBI deduction (Section 199A) | $17,374.84 |
| Taxable income | $69,499.38 |
| Federal income tax (brackets) | $10,001.86 |
| Additional Medicare 0.9% on SE income (above threshold) | $0.00 |
| State income tax | $5,347.02 |
| Total tax (SE + federal + state) | $31,880.45 |
| Health insurance paid | $5,760.00 |
| Take-home | $79,359.55 |
Result: the 1099 rate that matches this W-2 offer is $69.89/hr. At the 1099 income above, the contract is behind the job by $5,350 a year after counting W-2 benefits.
$100,000 salary, single, Texas
What it checks: Same job as the default case with no state income tax: isolates the federal and self-employment effect.
Inputs: W-2 salary $100,000; 1099 rate $70.00/hr × 1,800 billable hours; business expenses $0; filing status SINGLE; state Texas; not a specified service business; self-paid health $480/month. Open in calculator.
| W-2 step | Amount |
|---|---|
| Salary | $100,000.00 |
| Social Security 6.2% (up to $184,500) | $6,200.00 |
| Medicare 1.45% | $1,450.00 |
| Additional Medicare 0.9% (above threshold) | $0.00 |
| Taxable income (salary − $16,100 standard deduction) | $83,900.00 |
| Federal income tax | $13,170.00 |
| State income tax | $0.00 |
| Take-home | $79,180.00 |
| Employer health + 401(k) match | $10,600.00 |
| Total value | $89,780.00 |
| 1099 step | Amount |
|---|---|
| Gross 1099 income | $126,000.00 |
| Business expenses | $0.00 |
| Net profit (floored at $0) | $126,000.00 |
| SE tax base (92.35% of profit) | $116,361.00 |
| Social Security part 12.4% (up to $184,500) | $14,428.76 |
| Medicare part 2.9% | $3,374.47 |
| Self-employment tax | $17,803.23 |
| Deduction: half of SE tax | $8,901.62 |
| Deduction: self-employed health insurance | $5,760.00 |
| Adjusted gross income | $111,338.39 |
| Standard deduction | $16,100.00 |
| QBI deduction (Section 199A) | $19,047.68 |
| Taxable income | $76,190.70 |
| Federal income tax (brackets) | $11,473.96 |
| Additional Medicare 0.9% on SE income (above threshold) | $0.00 |
| State income tax | $0.00 |
| Total tax (SE + federal + state) | $29,277.19 |
| Health insurance paid | $5,760.00 |
| Take-home | $90,962.81 |
Result: the 1099 rate that matches this W-2 offer is $69.06/hr. At the 1099 income above, the contract is ahead of the job by $1,183 a year after counting W-2 benefits.
$100,000 salary, married filing jointly, Texas
What it checks: Filing status: joint standard deduction and brackets.
Inputs: W-2 salary $100,000; 1099 rate $70.00/hr × 1,800 billable hours; business expenses $0; filing status MFJ; state Texas; not a specified service business; self-paid health $480/month. Open in calculator.
| W-2 step | Amount |
|---|---|
| Salary | $100,000.00 |
| Social Security 6.2% (up to $184,500) | $6,200.00 |
| Medicare 1.45% | $1,450.00 |
| Additional Medicare 0.9% (above threshold) | $0.00 |
| Taxable income (salary − $32,200 standard deduction) | $67,800.00 |
| Federal income tax | $7,640.00 |
| State income tax | $0.00 |
| Take-home | $84,710.00 |
| Employer health + 401(k) match | $10,600.00 |
| Total value | $95,310.00 |
| 1099 step | Amount |
|---|---|
| Gross 1099 income | $126,000.00 |
| Business expenses | $0.00 |
| Net profit (floored at $0) | $126,000.00 |
| SE tax base (92.35% of profit) | $116,361.00 |
| Social Security part 12.4% (up to $184,500) | $14,428.76 |
| Medicare part 2.9% | $3,374.47 |
| Self-employment tax | $17,803.23 |
| Deduction: half of SE tax | $8,901.62 |
| Deduction: self-employed health insurance | $5,760.00 |
| Adjusted gross income | $111,338.39 |
| Standard deduction | $32,200.00 |
| QBI deduction (Section 199A) | $15,827.68 |
| Taxable income | $63,310.70 |
| Federal income tax (brackets) | $7,101.28 |
| Additional Medicare 0.9% on SE income (above threshold) | $0.00 |
| State income tax | $0.00 |
| Total tax (SE + federal + state) | $24,904.51 |
| Health insurance paid | $5,760.00 |
| Take-home | $95,335.49 |
Result: the 1099 rate that matches this W-2 offer is $69.99/hr. At the 1099 income above, the contract is ahead of the job by $25 a year after counting W-2 benefits.
$200,000 salary, single, New York, specified service business
What it checks: High income near the QBI threshold ($201,750) with a state income tax.
Inputs: W-2 salary $200,000; 1099 rate $130.00/hr × 1,800 billable hours; business expenses $0; filing status SINGLE; state New York; specified service business; self-paid health $480/month. Open in calculator.
| W-2 step | Amount |
|---|---|
| Salary | $200,000.00 |
| Social Security 6.2% (up to $184,500) | $11,439.00 |
| Medicare 1.45% | $2,900.00 |
| Additional Medicare 0.9% (above threshold) | $0.00 |
| Taxable income (salary − $16,100 standard deduction) | $183,900.00 |
| Federal income tax | $36,734.00 |
| State income tax | $10,759.75 |
| Take-home | $138,167.25 |
| Employer health + 401(k) match | $14,600.00 |
| Total value | $152,767.25 |
| 1099 step | Amount |
|---|---|
| Gross 1099 income | $234,000.00 |
| Business expenses | $0.00 |
| Net profit (floored at $0) | $234,000.00 |
| SE tax base (92.35% of profit) | $216,099.00 |
| Social Security part 12.4% (up to $184,500) | $22,878.00 |
| Medicare part 2.9% | $6,266.87 |
| Self-employment tax | $29,144.87 |
| Deduction: half of SE tax | $14,572.44 |
| Deduction: self-employed health insurance | $5,760.00 |
| Adjusted gross income | $213,667.57 |
| Standard deduction | $16,100.00 |
| QBI deduction (Section 199A) | $39,513.51 |
| Taxable income | $158,054.06 |
| Federal income tax (brackets) | $30,530.97 |
| Additional Medicare 0.9% on SE income (above threshold) | $144.89 |
| State income tax | $11,566.14 |
| Total tax (SE + federal + state) | $71,386.87 |
| Health insurance paid | $5,760.00 |
| Take-home | $156,853.13 |
Result: the 1099 rate that matches this W-2 offer is $126.84/hr. At the 1099 income above, the contract is ahead of the job by $4,086 a year after counting W-2 benefits.
$250,000 salary, single, Texas, specified service business
What it checks: QBI phase-out for a service business, Social Security wage-base cap and 0.9% Additional Medicare tax.
Inputs: W-2 salary $250,000; 1099 rate $160.00/hr × 1,800 billable hours; business expenses $0; filing status SINGLE; state Texas; specified service business; self-paid health $480/month. Open in calculator.
| W-2 step | Amount |
|---|---|
| Salary | $250,000.00 |
| Social Security 6.2% (up to $184,500) | $11,439.00 |
| Medicare 1.45% | $3,625.00 |
| Additional Medicare 0.9% (above threshold) | $450.00 |
| Taxable income (salary − $16,100 standard deduction) | $233,900.00 |
| Federal income tax | $51,304.00 |
| State income tax | $0.00 |
| Take-home | $183,182.00 |
| Employer health + 401(k) match | $16,600.00 |
| Total value | $199,782.00 |
| 1099 step | Amount |
|---|---|
| Gross 1099 income | $288,000.00 |
| Business expenses | $0.00 |
| Net profit (floored at $0) | $288,000.00 |
| SE tax base (92.35% of profit) | $265,968.00 |
| Social Security part 12.4% (up to $184,500) | $22,878.00 |
| Medicare part 2.9% | $7,713.07 |
| Self-employment tax | $30,591.07 |
| Deduction: half of SE tax | $15,295.54 |
| Deduction: self-employed health insurance | $5,760.00 |
| Adjusted gross income | $266,944.47 |
| Standard deduction | $16,100.00 |
| QBI deduction (Section 199A) | $18,440.90 |
| Taxable income | $232,403.57 |
| Federal income tax (brackets) | $50,825.14 |
| Additional Medicare 0.9% on SE income (above threshold) | $593.71 |
| State income tax | $0.00 |
| Total tax (SE + federal + state) | $82,009.92 |
| Health insurance paid | $5,760.00 |
| Take-home | $200,230.08 |
Result: the 1099 rate that matches this W-2 offer is $159.45/hr. At the 1099 income above, the contract is ahead of the job by $448 a year after counting W-2 benefits.
$240,000 net 1099 profit, single, Texas
What it checks: Self-employment tax above the $184,500 Social Security wage base (annual 1099 income entered directly).
Inputs: W-2 salary $200,000; 1099 income $260,000; business expenses $20,000; filing status SINGLE; state Texas; not a specified service business; self-paid health $480/month. Open in calculator.
| W-2 step | Amount |
|---|---|
| Salary | $200,000.00 |
| Social Security 6.2% (up to $184,500) | $11,439.00 |
| Medicare 1.45% | $2,900.00 |
| Additional Medicare 0.9% (above threshold) | $0.00 |
| Taxable income (salary − $16,100 standard deduction) | $183,900.00 |
| Federal income tax | $36,734.00 |
| State income tax | $0.00 |
| Take-home | $148,927.00 |
| Employer health + 401(k) match | $14,600.00 |
| Total value | $163,527.00 |
| 1099 step | Amount |
|---|---|
| Gross 1099 income | $260,000.00 |
| Business expenses | $20,000.00 |
| Net profit (floored at $0) | $240,000.00 |
| SE tax base (92.35% of profit) | $221,640.00 |
| Social Security part 12.4% (up to $184,500) | $22,878.00 |
| Medicare part 2.9% | $6,427.56 |
| Self-employment tax | $29,305.56 |
| Deduction: half of SE tax | $14,652.78 |
| Deduction: self-employed health insurance | $5,760.00 |
| Adjusted gross income | $219,587.22 |
| Standard deduction | $16,100.00 |
| QBI deduction (Section 199A) | $40,697.44 |
| Taxable income | $162,789.78 |
| Federal income tax (brackets) | $31,667.55 |
| Additional Medicare 0.9% on SE income (above threshold) | $194.76 |
| State income tax | $0.00 |
| Total tax (SE + federal + state) | $61,167.87 |
| Health insurance paid | $5,760.00 |
| Take-home | $173,072.13 |
Result: the 1099 rate that matches this W-2 offer is $137.61/hr. At the 1099 income above, the contract is ahead of the job by $9,545 a year after counting W-2 benefits.
1099 expenses larger than income, single, Texas
What it checks: Edge case: profit is floored at $0, so there is no self-employment tax. Losses are not carried forward and take-home never goes below $0.
Inputs: W-2 salary $60,000; 1099 income $8,000; business expenses $12,000; filing status SINGLE; state Texas; not a specified service business; self-paid health $0/month. Open in calculator.
| W-2 step | Amount |
|---|---|
| Salary | $60,000.00 |
| Social Security 6.2% (up to $184,500) | $3,720.00 |
| Medicare 1.45% | $870.00 |
| Additional Medicare 0.9% (above threshold) | $0.00 |
| Taxable income (salary − $16,100 standard deduction) | $43,900.00 |
| Federal income tax | $5,020.00 |
| State income tax | $0.00 |
| Take-home | $50,390.00 |
| Employer health + 401(k) match | $9,000.00 |
| Total value | $59,390.00 |
| 1099 step | Amount |
|---|---|
| Gross 1099 income | $8,000.00 |
| Business expenses | $12,000.00 |
| Net profit (floored at $0) | $0.00 |
| SE tax base (92.35% of profit) | $0.00 |
| Social Security part 12.4% (up to $184,500) | $0.00 |
| Medicare part 2.9% | $0.00 |
| Self-employment tax | $0.00 |
| Deduction: half of SE tax | $0.00 |
| Deduction: self-employed health insurance | $0.00 |
| Adjusted gross income | $0.00 |
| Standard deduction | $16,100.00 |
| QBI deduction (Section 199A) | $0.00 |
| Taxable income | $0.00 |
| Federal income tax (brackets) | $0.00 |
| Additional Medicare 0.9% on SE income (above threshold) | $0.00 |
| State income tax | $0.00 |
| Total tax (SE + federal + state) | $0.00 |
| Health insurance paid | $0.00 |
| Take-home | $0.00 |
Result: the 1099 rate that matches this W-2 offer is $48.26/hr. At the 1099 income above, the contract is behind the job by $59,390 a year after counting W-2 benefits.
Verify one case yourself, without this site
You do not need the calculator or its engine to check a result. Take “$100,000 salary, single, Texas” and follow the IRS formulas with a spreadsheet:
- Net profit = $126,000.00 − $0.00 = $126,000.00.
- Self-employment tax (Schedule SE) = $126,000.00 × 0.9235 = $116,361.00; × 15.3% = $17,803.23 (Social Security 12.4% applies up to $184,500 of that base).
- Half of SE tax = $8,901.62; self-employed health insurance deduction = $5,760.00; adjusted gross income = $111,338.39.
- Taxable income before QBI = AGI − $16,100 standard deduction; QBI deduction = 20% of (profit − half SE tax − health deduction) = $19,047.68; taxable income = $76,190.70.
- Apply the 2026 brackets from Rev. Proc. 2025-32 to get federal income tax = $11,473.96.
If your numbers differ by more than a few cents, or if you find an error, email [email protected] and we will correct the engine and republish.
What these cases do not cover
Local income taxes, credits, itemized deductions, retirement contributions on the 1099 side, other household income and capital gains are not modeled, and net losses are not carried forward. State tax uses the 2026 rate tables listed in the methodology. ContractMath is a decision-support tool: these are estimates, not tax, legal or financial advice, and we are not responsible for decisions or filings made from them.
Sources: IRS Rev. Proc. 2025-32 (brackets, standard deduction, QBI), SSA wage base, IRS Additional Medicare Tax Q&A.
FAQ
Can I check the calculator by hand?
Yes. Every case below shows each line in order: gross income, expenses, self-employment tax (92.35% of profit, 12.4% Social Security up to $184,500 plus 2.9% Medicare), the deduction for half of SE tax, self-employed health insurance, the standard deduction, the QBI deduction, bracket tax from IRS Rev. Proc. 2025-32, then state tax.
Where can I download these cases?
As JSON at https://contractmath.com/data/w2-vs-1099-test-cases-2026.json, with complete inputs and expected outputs for each case.
What happens when business expenses exceed 1099 income?
The calculator floors profit at $0, so there is no self-employment tax and take-home is $0 on the 1099 side. It does not carry a loss forward or offset other income.
Open the W-2 vs 1099 calculator
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