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Contract Value Estimator

Know exactly what a contract is worth before you respond. Net pay after taxes, W2 equivalent salary, commute cost deduction, and a Strong/Fair/Low/Walk Away verdict.

Where this fits

📦 Business & Seller OpsGoing 1099FreelancersEmployees

This tool lives inside Going 1099 and is most useful for freelancers and employees.

Corp Tax Rate21%
SE Threshold$400
FICA Cap 2024$168,600

Contract Details

Contract type
Work location

Tax Rates

1099 contractors also pay ~14.13% net SE tax on top of income taxes (self-employment tax).

Verdict: Fair

Reasonable contractor premium, but there may be room to negotiate. Consider your pipeline before accepting.

Total Contract Value
$88,400
1,040 total hours
Net After Taxes
$53,727
Take-home estimate
Net Effective Rate
$51.66/hr
Net / your hours
Monthly Net Income
$8,955
Avg over contract

W2 Equivalent Comparison

Gross Annualized
$176,800
At this rate + hours
W2 Equivalent
$158,022
W2 salary = same net pay
Contractor Premium
+11.9%
vs equivalent W2
1

Gross contract value

gross = rate × hours/week × duration_weeks

$85.00/hr × 40 hrs × 26 wks

= $88,400

2

Self-employment tax (1099/C2C)

SE_tax = gross × 14.13%

$88,400 × 14.13%

= $12,491

Net SE tax after deducting the employer-equivalent half (15.3% × 92.35% = 14.13%).

3

Income tax

income_tax = (gross − SE_tax/2) × (federal% + state%)

$82,155 × 27%

= $22,182

4

Net contract value

net = gross − SE_tax − income_tax − commute

$88,400 − $12,491 − $22,182 − $0

= $53,727

5

W2 equivalent salary

w2_equiv = net_annualized / 0.68

$107,455 / 0.68

= $158,022

W2 employees take home ≈ 68% of gross after typical tax + benefits costs. This is the W2 salary that produces equal take-home.

Key insight

The W2 equivalent is the key number to negotiate from. A 1099 contractor billing $85/hr at 40 hrs/week needs to earn at least 30-40% more than a W2 employee to break even after SE tax, health insurance, no PTO, and no 401k match. If your W2 equivalent is below your target salary, counter-offer — don't just accept.

Use this result in →

W2 vs 1099 →Freelance Rate →Pricing Strategy →

#ShowYourWork

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