Is a 1099 contractor job worth it compared to a W2 salary?
Switching from a salary to a 1099 contractor role can result in lower net take-home pay because of higher self-employment taxes and lost benefits, even if the headline pay looks higher. This hidden shift makes it difficult to tell if a nominally higher offer will actually leave you better off financially.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
- 1Asking the employer for higher pay
- 2Calculating a rough benefits package annual number
- 3Setting aside a percentage of income for taxes
- 4Declining the position
- 5Evaluating tax write-offs versus W2 savings
- 6Weighing long-term corporate security against personal relationships with current employers
- 7Considering picking up weekend side work
In their words
Unedited, most upvoted first, each linked to the thread it came from.
“My main question is if this would result in me making less than staying at my W2 job making 63k. Is a position that pays 72k as 1099 worth it?”source ↗
“I live in New Jersey so my concern is that my taxes will be higher as a 1099 contractor.”source ↗
“I'm mainly concerned that the 9k extra is make with this new opportunity will all go to taxes or even worse that I'll end up making less.”source ↗
Where this came up
People with this problem also raised
- 6Should I take a very low-paying entry-level job out of desperation?
- 2Is a massive pay cut for startup equity worth it?
- 37How do I know if a contractor quote is fair?
- 7How do I know if my salary is fair?
- 4How can small businesses afford twenty dollar minimum wage?
- 4How to choose between job offers when you have a baby on the way