Calculator
The same number is not the same offer.
On a pay stub, your employer quietly pays half your Social Security and Medicare. On a 1099 there is no employer, so both halves are yours — and nobody takes it out along the way. On $90,000.00 that comes to $12,717 $12,716.60 you have to find yourself. To end up where the salary left you, you would need to charge $96,775.37.
Self-employment tax is about 15.3% — both the employee and employer halves of payroll tax — applied to about 92.35% of net earnings, that factor being the employer-equivalent share removed before the tax is computed. Half of the resulting Social Security and Medicare is deductible above the line, which softens the gap without closing it. At $90,000 the tax is $12,717 against a break-even contract gross of $96,775. Nothing is withheld, so the liability surfaces at filing or through quarterly estimates.
The same work, two ways
salary ahead| Tax | W-2 | 1099 |
|---|---|---|
| Social Security and Medicare | $6,885 | $12,717 |
| Federal income tax | $10,970 | $9,571 |
| State and local | $1,759 | $1,584 |
A contractor pays both halves of Social Security and Medicare — the half an employer normally covers is now yours — on 92.35% of what you bill. Half of that is deductible, which softens it but does not close it.
This leaves out the qualified business income deduction, which can be worth up to a fifth of business income and would narrow the gap. Its limits depend on your trade and income in ways this site does not model, so the figures above are the cautious end for the contract side. Nothing here says whether a role may lawfully be a contract at all.
What to charge, by salary
Each row is the contract figure that leaves you exactly where the salary did. The premium grows with pay until Social Security stops at its ceiling of $184,500.00, after which only Medicare keeps climbing.
Break-even gross by salary, federal and payroll tax only. The premium tracks the doubled Social Security rate up to the wage base and the doubled Medicare rate beyond it, net of the deductible half.
| W-2 salary | Self-employment tax | Charge instead | The premium |
|---|---|---|---|
| $40,000 | $5,652 | $43,015 | $3,015 |
| $60,000 | $8,478 | $64,522 | $4,522 |
| $90,000 | $12,717 | $96,775 | $6,775 |
| $120,000 | $16,955 | $129,034 | $9,034 |
| $180,000 | $25,433 | $193,547 | $13,547 |
| $250,000 | $29,851 | $264,796 | $14,796 |
The tax with a ceiling
A $75,000 Texas salary
| Wage base | $184,500 |
|---|---|
| Social Security rate | 6.2% |
| Medicare surtax begins | $200,000 |
Social Security stops at the wage base. Medicare does not, and gains a surtax higher up.
Where the money goes
A $75,000 Texas salary
- Federal income tax$7,670
- Social Security and Medicare$5,738
- Yours$61,593
| Federal income tax10.23% | $7,670 |
|---|---|
| Social Security and Medicare7.65% | $5,738 |
| Yours82.12% | $61,593 |
The same question, in every state
On a $90,000.00 salary the contract figure you need ranges from $96,765.29 in California to $96,775.37 in Wyoming. The federal part is the same everywhere; the rest is your state.
Break-even contract gross at $90,000, including state and any modeled local income tax. The spread is entirely a state effect: self-employment tax itself is federal and does not vary.
| State | Charge instead |
|---|---|
| California | $96,765 |
| Oregon | $96,766 |
| District of Columbia | $96,766 |
| Hawaii | $96,767 |
| Maine | $96,768 |
| Minnesota | $96,768 |
| South Carolina | $96,768 |
| Delaware | $96,769 |
| Vermont | $96,769 |
| New Jersey | $96,769 |
| Wisconsin | $96,769 |
| New York | $96,769 |
| Virginia | $96,769 |
| Montana | $96,770 |
| Kansas | $96,770 |
| Connecticut | $96,770 |
| Idaho | $96,770 |
| Massachusetts | $96,770 |
| Georgia | $96,770 |
| Illinois | $96,770 |
| New Mexico | $96,770 |
| Maryland | $96,771 |
| Missouri | $96,771 |
| West Virginia | $96,771 |
| Nebraska | $96,771 |
| Oklahoma | $96,771 |
| Utah | $96,771 |
| Colorado | $96,771 |
| Michigan | $96,771 |
| Mississippi | $96,771 |
| North Carolina | $96,771 |
| Alabama | $96,772 |
| Iowa | $96,772 |
| Rhode Island | $96,772 |
| Arkansas | $96,772 |
| Kentucky | $96,772 |
| Pennsylvania | $96,772 |
| Louisiana | $96,772 |
| Indiana | $96,772 |
| Ohio | $96,773 |
| Arizona | $96,773 |
| North Dakota | $96,773 |
| Alaska | $96,775 |
| Florida | $96,775 |
| Nevada | $96,775 |
| New Hampshire | $96,775 |
| South Dakota | $96,775 |
| Tennessee | $96,775 |
| Texas | $96,775 |
| Washington | $96,775 |
| Wyoming | $96,775 |
The qualified business income deduction is not modeled and would narrow the gap, so these figures are the cautious end for the contract side. Health insurance, paid leave and an employer retirement match are not tax and are not included — add them in the tool above. Nothing here says whether a role may lawfully be classified as a contract.