Jasper Accountancy · MSP Tools

Employee vs. Contractor Calculator

What a tech really costs you as a W-2 employee versus a 1099 contractor, fully loaded, with a misclassification-risk read.

W-2

Employee

Annual base salary $ Paid time off (days / year) days Health insurance (employer share / month) $

Retirement match % Workers’ comp rate %

State unemployment (SUTA) rate % SUTA wage base $

Other overhead: software seats, payroll, training / year $

1099

Contractor

Contractor rate (per hour) $ Overhead you still cover: software, tools / year $

A true contractor carries their own payroll taxes, benefits, workers’ comp, and unemployment, so those lines drop off your side of the ledger. The trade-off is control and permanence, which drives the risk read below.

Hours of work per year (both sides) 2,080 hrs

Part-timeFull-time ≈ 2,080Heavy load

W-2 · loaded

$0.00 / productive hr

1099 · total

$0.00 / hr

Break-even rate

$0.00/hr

Pay a 1099 above this and they cost more than the employee

Where the employee’s true cost comes from

Misclassification risk check

Cost isn’t the only factor. Calling someone a 1099 doesn’t make them one. The IRS and most states look at control and permanence. Check every statement that’s true of how you’d actually use this person.

Want the classification done right?

Jasper Accountancy can pressure-test the W-2 vs. 1099 call, structure it cleanly, and keep you out of reclassification trouble.

Talk to us →

Estimate only. Not tax, legal, or accounting advice, and not a formal worker-classification determination. Figures use 2026 federal defaults (Social Security 6.2% to a $184,500 wage base, Medicare 1.45% with no cap, FUTA 0.6% on the first $7,000); SUTA and other rates vary by state and employer experience. Some states apply a stricter “ABC test,” under which most workers are presumed employees. Actual cost and classification depend on your specific facts. Consult Jasper Accountancy before you decide.