W-2 vs 1099 Take-Home Calculator

Compare take-home pay as an employee versus an independent contractor.

Editorial review in progress · How we review

Uses 2026 figures

Your results will appear here.
Adjust the numbers, then press Calculate.

Assumptions

Uses 2026 federal brackets, standard deduction and payroll tax limits.
1099 side includes self-employment tax, the deduction for half of it, the self-employed health insurance deduction and the QBI deduction, which phases out for healthcare businesses above the 2026 thresholds.
W-2 benefits are counted at the dollar value you enter.

More healthcare jobs are offered as independent contractor (1099) roles: locums, telehealth, staffing-agency work, and some outpatient positions. A 1099 offer usually pays more per hour, but you lose benefits and pick up taxes and costs an employer would have covered. This calculator compares the two the fair way: what you actually keep.

What this calculator does

On the W-2 side, enter your salary and the yearly value of employer-paid benefits (health insurance, retirement match, malpractice, CME). On the 1099 side, enter gross pay, business expenses, the health insurance you'd buy and what you'd put in a solo 401(k) or SEP IRA. Add your filing status and state tax rate.

The calculator shows which option leaves you better off, by how much, and the 1099 gross you'd need to match the W-2 job.

The formula in plain English

W-2 value = salary − federal tax − Social Security and Medicare (7.65%) − state tax + employer benefits.

1099 value = gross − expenses − self-employment health insurance − retirement contribution − federal tax − self-employment tax − state tax, plus the retirement contribution (it's still your money).

Self-employment tax is 15.3% on 92.35% of profit, because you pay both the employee and employer halves. Half of it is deductible. The calculator also includes the self-employed health insurance deduction, retirement plan deductions and the QBI deduction where your income allows. Federal tax uses 2026 brackets.

Breakeven 1099 gross is found by testing 1099 amounts until the two values are equal.

A worked example

Alex, a nurse practitioner, has two offers:

W-2: $140,000 salary plus about $22,000 in benefits.
1099: $165,000, with $6,000 in expenses, $8,000 for health insurance, and $15,000 into a solo 401(k).

Alex is single in a state with a 5% income tax.

W-2: take-home plus benefits ≈ $121,960.
1099: take-home plus retirement savings ≈ $108,460.
The W-2 job comes out about $13,500 a year ahead.
Alex would need about $185,800 of 1099 pay — 33% more than the W-2 salary — to break even.

The 1099 offer looked $25,000 better. After taxes, benefits and costs, it's worse.

Why it matters at each career stage

If you're: Resident / fellow

Most residents are W-2 employees, but moonlighting is often 1099. Use this to see why contractor pay needs to be higher, and plan for quarterly taxes.

If you're: Employed

Before switching to a 1099 role, list every benefit you'd lose: health and disability insurance, retirement match, paid time off, CME money, malpractice and tail coverage. Put a dollar value on each one in the benefits field.

If you're: Practice owner

If you own a practice, you may already pay contractors. This calculator shows the math from their side, which can help you set fair rates when recruiting.

Things to weigh beyond the numbers

Paid time off. A 1099 rate is earned only when you work. Count vacation and sick days when you set your target.

Stability. Contracts can end with short notice, and agencies may not guarantee hours.

Paperwork. You'll make quarterly tax payments, track expenses and likely need a CPA.

Retirement upside. A solo 401(k) can shelter far more than many employer plans, which is a real advantage at higher incomes.

Next steps: estimate payments with the quarterly estimated tax calculator, compare locums specifically with locums vs employed, and read our W-2 vs 1099 guide.

Frequently asked questions

How much more should a 1099 job pay?

Enough to cover the employer's share of payroll tax, the benefits you lose and your new business costs. For many clinicians that works out to 20–30% more than the W-2 salary, but run your own numbers.

Can I get the QBI deduction as a clinician?

Healthcare is a specified service business, so the 20% QBI deduction phases out between $211,300 and $261,300 of taxable income for single filers in 2026 ($422,600 to $522,600 for joint filers).

Who pays for malpractice insurance on a 1099?

Read the contract. Some facilities and staffing agencies cover it; others expect you to buy your own. Add it to expenses if it's on you.

Can I be both W-2 and 1099?

Yes. Many clinicians have a W-2 main job and 1099 side work. For that, use the moonlighting calculator.

Do I need an LLC or S-corp?

Not to work on a 1099. An S-corp can lower payroll taxes at higher incomes but adds payroll and accounting costs. Talk to a CPA before you set one up.

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