How to Use the W2 vs 1099 Hourly Rate Calculator
A W2 to 1099 rate calculator reveals costs hidden by a simple hourly comparison. Contractor revenue must replace employer support and cover capacity that cannot be billed.
Do not compare headline rates alone
An employee wage sits inside a compensation package. A contractor rate is business revenue from which taxes, tools, insurance, leave and administration must be funded.
Use realistic billable hours
Contractors rarely invoice every working hour. Sales, bookkeeping, proposals and professional development reduce paid utilization.
Review non-financial tradeoffs
Independence, schedule control and upside may be valuable, while income volatility, collection risk and classification rules may favor employment.