W-2 to 1099 Rate Converter
Turn a salary into the contract rate that actually replaces it. Counts the employer half of payroll tax, the benefits you’d give up, paid time off, unbillable hours, and business costs.
Equivalent 1099 hourly rate
—
— your W-2 hourly of —
What the contract rate has to cover
Matches total compensation before income tax. Income tax works about the same either way, so it isn’t added.
How we calculate
- Employer payroll tax = 6.2% of salary up to the $184,500 2026 Social Security wage base + 1.45% Medicare. As a contractor you pay this “employer half” yourself through self-employment tax.
- 1099 revenue needed = salary + benefits + employer payroll tax + business expenses.
- Billable hours = hours per week × billable share × (52 − unpaid days off ÷ 5).
- Equivalent hourly rate = revenue needed ÷ billable hours. Day rate = hourly × 8. Multiplier = contract rate ÷ (salary ÷ (hours × 52)).
Before you rely on this
Not tax, legal, or financial advice. This is a break-even comparison, not a market rate. It doesn’t price in risk, unpaid gaps between contracts beyond what you enter, or what clients in your field actually pay. Benefits values vary widely; use your own statement.
Official sources & tax year
Frequently asked questions
How do I convert a W-2 salary to a 1099 hourly rate?
Add up salary, the benefits you’d lose, the employer’s 7.65% payroll tax, and business expenses. Then divide by the hours you can realistically bill in a year, not 2,080. With the example inputs ($12,000 of benefits, 20 unpaid days off, 75% billable, $6,000 of expenses), a $90,000 salary works out to about $80 an hour, roughly 1.8× the W-2 hourly rate.
What is a good W-2 to 1099 multiplier?
Rules of thumb run from about 1.25× to 2× your W-2 hourly rate. Where you land depends on benefits, time off, and how much of your time you can bill. The calculator shows your multiplier from your own inputs.
Why isn’t income tax included?
You pay income tax either way, and a sole proprietor’s income tax on the same profit is roughly similar. The real difference is the employer half of Social Security and Medicare, which the calculator adds.
What day rate equals my salary?
Take the equivalent hourly rate and multiply by the billable hours in your day. The calculator shows an 8-billable-hour day rate. If your days include admin time, use fewer hours.