Educational guide

1099 vs W2 Guide

A practical guide to comparing contractor income with salary, benefits, tax burden, and operating risk.

Educational content only. Not tax, legal, accounting, or employment advice.

People often compare a 1099 offer with a W2 salary by looking only at the headline number. That usually misses the real tradeoff. Contractor work may bring more gross income, but it can also shift taxes, benefits, admin time, equipment costs, and downtime risk onto you.

W2 roles may include payroll withholding, employer tax contributions, insurance, paid time off, and retirement matching. Contractor work may offer flexibility or higher upside, but it usually requires better recordkeeping and stronger cash management.

The right comparison is not just salary versus revenue. It is net value versus net value after taxes, benefits, business expenses, and risk are considered. A calculator helps frame the comparison, but classification and tax treatment should be reviewed with qualified professionals.