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Tool 03 of 07

Contract → Full-Time Equivalent

You have a contract rate. What W2 salary matches it once you account for self-employment tax, the benefits you pay yourself, and lost PTO?

How to use this calculator
1

Enter your contract hourly rate and the hours per week you work.

2

Add the PTO days, benefits cost you pay as 1099, and the 401k match percentage the W2 role would offer.

3

The equivalent W2 salary updates instantly — if a full-time offer is below this, the contract wins financially.

Your contract details

Live results
$ /hr

The gross hourly rate in your contract or offer, before any taxes.

Weekly hours you are contracted to work. Standard is 40; some contracts specify 30 or 32.

days

Days off a W2 employee gets paid for. US average: 15 days. Tech companies often offer 20+. Contractors earn nothing for days not worked.

$

Annual out-of-pocket for health, dental, and vision when self-employed. ACA marketplace plans often run $6,000–$18,000/yr solo.

%

Percentage the employer would match in 401k. As a contractor you fund 100% of retirement yourself. Enter 0 to ignore.

Equivalent W2 salary
$—
annual base salary equivalent
Contract annual gross —
SE tax cost —
Benefits you pay —
Lost PTO value —
401k match value —
Enter your rate to see the W2 equivalent.
Contract gross allocation
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Frequently asked questions
What does "equivalent W2 salary" mean exactly?
It is the gross W2 salary where your net financial outcome (after employer pays benefits, matches 401k, and covers employer FICA) would be equal to what you net from the contract after you pay all your own taxes, benefits, and account for lost PTO.
Why does PTO matter in this calculation?
As a 1099 contractor you earn nothing on days you do not work. A W2 employee on 15 days PTO gets paid for those days — essentially free income. We convert PTO to its dollar value (daily rate × PTO days) and add it to the W2 side.
What about the SE tax deduction?
Self-employed people can deduct 50% of SE tax from gross income before calculating federal income tax. This partially offsets the SE tax burden. For simplicity, this calculator shows gross SE tax cost without applying the deduction, which slightly overstates the 1099 disadvantage.
How accurate is this for my specific situation?
Very good directional accuracy. Tax brackets, deductions (home office, retirement contributions, health insurance premiums), state-specific rules, and benefit package differences can all shift the number. Use it to get in the right range, then confirm with a CPA.