1099 Self-Employed Tax Calculators

What decides a contractor's tax bill

The same $100,000 is taxed differently as contract profit and as a salary. Three things set the size of that difference.

Self-employment tax, and the deductions that offset it

On $100,000 of net profit, self-employment tax is $14,130: 15.3% on 92.35% of the profit. An employee on the same salary pays $7,650 of Social Security and Medicare, because the employer covers the other half. Two deductions then work against the gap: half of the self-employment tax, $7,065, is deducted before income tax, and the qualified business income deduction takes up to 20% off qualified business income.

How much the state moves it

After those deductions, the middle of the 51 jurisdictions, West Virginia, leaves a contractor $1,204 a year worse off than an employee on $100,000. Half of them fall between $968 (Vermont) and $1,297 (Kentucky). The spread comes from each state's income tax rules and, in some states, from payroll levies on wages that a sole proprietor does not pay.

Where the Social Security ceiling starts to help

The 12.4% Social Security part stops once 92.35% of profit reaches the $184,500 wage base — at about $199,783 of profit. Above that, each extra dollar pays only the 2.9% Medicare part, plus the additional 0.9% above $200,000 for a single filer.

Reading a state page

• Net profit is the starting point — revenue after business expenses, as on Schedule C. Entering revenue overstates the tax.
• Keep as 1099 and keep as W-2 start from the same headline amount, so the difference between them is the tax cost of the arrangement and nothing else.
• The break-even rate is the contract income that matches the salary after tax: between −0.68% and +2.22% relative to the salary, depending on the state. It covers tax only.
• The comparison across the range runs from $30,000 to $300,000, because the deductions phase in and out at different incomes.

Common mistakes

• Setting aside 15.3% of revenue on top of income tax. The rate applies to 92.35% of profit, not revenue, and half of it is then deducted.
• Comparing a contract rate with a salary one to one. On $100,000 the contractor pays $6,480 more in payroll tax before any deduction, and funds the benefits an employer would provide.
• Leaving out the qualified business income deduction. It is worth up to 20% of qualified business income, with a $400 minimum once that income reaches $1,000.
• Using the figure for estimated payments or an S-corporation decision. Neither quarterly estimated payments nor S-corporation treatment is modelled here, and both can change the answer.

Where to go next

• Open your state below for the full comparison across incomes and filing statuses.
• Salary after tax — the same income as W-2 wages, in every state.
• Methodology — self-employment tax, the deduction rules and their sources.
• Disclaimer — what the self-employed engine leaves out.