With 0.6% FUTA and 2% SUTA, the W-2 total is $57,060.00. The contractor column is $60,000.00 if insurance is left blank. The contractor column is $2,940.00 higher on those figures.
Tool · cost only
Employee vs Contractor Cost Calculator
The left column is a W-2 wage plus 2026 employer FICA and the unemployment tax you enter. The right column is the contractor amount plus any insurance or admin you choose to type. The page reports the two totals and the difference. It does not tell you which status is lawful.
Tax-year assumptions: 2026. IRS and Department of Labor worker classification is not computed here.
When this estimate fits
The comparison fits a budget draft when you already have a wage number and a contractor quote, and you want them on one page. It fits a conversation that starts with dollars and then moves, separately, to classification.
The comparison does not fit a decision that “therefore the business should hire a contractor.” IRS and Department of Labor worker classification is not computed here.
The W-2 column does not include employee withholding or net pay. The 1099 column does not compute self-employment tax for the contractor.
If both columns say $52,000 and extras are empty except FICA and the sample unemployment rates, the W-2 column is higher because employer FICA and unemployment sit only on that side.
The result always includes this limit: worker classification is not computed on this page.
On this tool
Why is there no “hire the cheaper option” button?
Cost is not status. A cheaper column can still be the wrong classification. The calculator stops at the two totals.
Does the W-2 column include employee FICA?
No. Employee FICA is withheld from the paycheck. Only the employer share is in the left total.
More questions?
See the home FAQ.