What "take-home" means for a 1099 worker
When you're paid on a 1099, nothing is withheld. The full amount hits your account, but a big chunk of it isn't really yours. You owe self-employment tax (15.3% on most of your net profit) and federal income tax. This calculator shows what's actually left after both, and, crucially, what percentage of each payment you should be setting aside so you're never short at tax time.
How to use it
- Enter your annual 1099 gross income: the total you're paid.
- Enter your business expenses. Every legitimate expense lowers your net profit, which lowers both your self-employment tax and your income tax, so this field matters a lot.
The result shows your net profit, the self-employment and income tax on it, your take-home, and the share of gross income to reserve for taxes.
Why expenses are your biggest lever
Unlike a W-2 employee, you can deduct the ordinary, necessary costs of doing business: home office, equipment, mileage (72.5¢/mile, 76¢ from July 1), software, supplies, phone, and more. Because those deductions cut both taxes at once, tracking them carefully is the highest-value habit a 1099 worker can build. The difference between claiming $5,000 and $15,000 of legitimate expenses can be a few thousand dollars in tax.
Don't forget quarterly payments and state tax
Because nothing is withheld, you generally owe quarterly estimated taxes: pay them and you avoid an underpayment penalty. This calculator estimates federal tax only; if your state has an income tax, your real take-home is lower still, so budget for it. And remember the self-employed can deduct health insurance premiums and shelter income in a SEP-IRA or Solo 401(k), both of which raise your take-home over time.
1099 vs. a salary
A common surprise: the same dollar figure as a 1099 contractor leaves you with less than it would as a W-2 salary, because you pay the employer half of payroll tax yourself. That's why contractors should charge more than the equivalent salary. See exactly how much more with the 1099 vs W-2 calculator, and estimate your full self-employment tax with the SE tax calculator.