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1099 Contractor vs W-2 Employee Cost Calculator

What does this come to under the current IRS rules?

Fully loaded employer cost of an employee against a contractor fee, with payroll tax, unemployment tax, benefits and the break-even fee.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Employee cost less contractor cost
$3,690
Positive means the employee costs more
Employer payroll taxes (FICA, FUTA, state)
$5,640
Total employee cost
$88,690
Drawn to one scale
Employer payroll taxes (FICA, FUTA, state)$5,640
Total employee cost$88,690
Contractor cost$85,000
Employee cost less contractor cost$3,690
Contractor fee at which cost is equal$88,690
All results
MeasureResult
Employer payroll taxes (FICA, FUTA, state)$5,640
Total employee cost$88,690
Contractor cost$85,000
Employee cost less contractor cost$3,690
Load factor on wages1.27
Contractor fee at which cost is equal$88,690
How this was worked out
Work shownrecomputed as you type
Employee cost = wage + 6.2% x min(wage, $184,500) + 1.45% x wage + 0.6% x min(wage, $7,000) + state unemployment + workers compensation + benefits + other
Load factor = employee cost / wage

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Employee cost = wage + 6.2% x min(wage, $184,500) + 1.45% x wage + 0.6% x min(wage, $7,000) + state unemployment + workers compensation + benefits + other
  • Load factor = employee cost / wage

How it works

Tax year: 2026.

Employer cost is wages plus employer Social Security at 6.2 percent up to the 2026 wage base, Medicare at 1.45 percent, federal unemployment tax at the net 0.6 percent on the first $7,000, state unemployment tax at your rate and base, workers compensation, benefits and other costs. A contractor costs the fee. The break-even fee is the employee's loaded cost.

The 0.6 percent FUTA rate assumes the full 5.4 percent state credit. Worker status depends on behavioral control, financial control and the relationship, not on cost, so this compares cost and does not decide classification.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

What is the load factor?

Loaded employer cost divided by wages. It shows how much each wage dollar costs after payroll tax and benefits.

Does cost decide worker status?

No. The IRS looks at behavioral control, financial control and the type of relationship.

What is the FUTA rate?

6.0 percent on the first $7,000 of wages, reduced by up to 5.4 percent state credit to 0.6 percent.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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