TooziIs $X as a 1099 contractor the same as $X on a W-2?
No. On a 1099 you pay both halves of Social Security and Medicare, nobody withholds for you, and benefits are on you. Enter a gross amount and see the gap, then see how much more a contractor rate needs to be to come out even.
Federal only; standard deduction; no credits. Benefits (health, retirement match, paid time off) are not included; add their value to the W-2 side when you compare offers.
What changes when you go 1099
The visible change is the extra 7.65% of payroll tax you now pay yourself. The quieter ones: no employer health contribution, no retirement match, no paid time off, and no unemployment insurance. The calculator models the tax side and leaves a line for the benefits you would have to replace.
In exchange you can deduct business expenses the W-2 employee cannot: the home office, the laptop, the mileage, half of the SE tax, and a solo 401(k) contribution that can be far larger than an employee's.
The break-even rate
A common rule is that a contractor rate should be 20 to 30% above the equivalent salary to cover payroll tax, benefits and unpaid time. The calculator shows the rate that matches the W-2 take-home on taxes alone; add your own benefits number on top.
Which one the IRS thinks you are
You do not get to choose. If the payer controls how, when and where you work, you are likely an employee no matter what the contract says. Misclassified workers can file Form SS-8 and Form 8919 to pay only the employee share.
Stop estimating. Have Toozi keep the running number.
Text your income and expenses as they happen. Toozi keeps the books, sets aside the right amount from each payment, texts you before every due date, and e-files the return.
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Questions
Does the contractor side include deductions?
You can enter expected business expenses. They reduce both SE tax and income tax, which is the main reason a well-run 1099 position can net more than the same W-2 salary.
What about state tax?
The calculator is federal. State income tax applies to both roughly equally; the real state difference is unemployment insurance and workers' comp, which only the W-2 side carries.
How does Toozi help a 1099 worker?
It tracks the expenses that close the gap, sets aside the right percentage from each payment, and files the Schedule C return at year end as an IRS Authorized e-file Provider.
Tax is a doozy.
Toozi isn't.
Text (844) 482-4881 and your first expense is logged in 10 seconds.