Tennessee 1099 vs. W-2 Calculator

As a 1099 contractor, you pay the full 15.3% self-employment tax and get no employer-provided benefits. As a W-2 employee, you split the 7.65% FICA tax with your employer, who also typically covers health insurance, retirement matching, and unemployment insurance on top of your pay.

A common rule of thumb is 20-30% more than an equivalent salary, to cover the extra self-employment tax and the benefits you're not getting — but the real number depends on your tax bracket and what benefits you'd otherwise receive. This calculator shows the exact tax-only gap for your numbers.

Yes — contractors can deduct half of their self-employment tax, claim the 20% qualified business income (QBI) deduction, and deduct ordinary business expenses (equipment, software, home office, mileage) that W-2 employees generally cannot.

Purely on take-home pay at the same gross amount, W-2 usually wins because of the FICA split. But 1099 work often comes with more flexibility, more deductions, and sometimes higher rates to begin with — the right call depends on your whole situation, not just the tax comparison.

Tennessee has no state income tax on wages or business income, which applies to both W-2 wages and 1099 net profit roughly the same way. It changes both take-home numbers by a similar amount but doesn't close the underlying self-employment tax gap.