1099 vs W-2: who pays more tax on $60,000
A W-2 employee and a 1099 contractor, each paid $60,000 in 2026: who withholds tax, Social Security and Medicare, income tax, and the total federal tax for each.
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Chapters
Key figures
| W-2 employee: Social Security and Medicare (7.65%) | $4,590.00 |
| Employer pays in addition | $4,590.00 |
| W-2 employee: federal income tax | $5,020.00 |
| W-2 employee: total federal tax | $9,610.00 |
| 1099 contractor: self-employment tax | $8,477.73 |
| 1099 contractor: federal income tax | $3,559.47 |
| 1099 contractor: total federal tax | $12,037.20 |
2026 rules, pay date November 6, 2026, single filer unless stated. Every number comes from the same engine as our calculators. Estimate, not tax advice.
Transcript
This video compares two workers. Each gets $60,000 in 2026. One is a W-2 employee. The other is a 1099 contractor.
The employer withholds tax from each paycheck of a W-2 employee.
A 1099 contractor gets the full payment. Nobody withholds tax. The contractor pays the tax to the IRS.
The employee pays 7.65% for Social Security and Medicare, $4,590.00. The employer pays the same amount again.
The contractor pays both parts as self-employment tax, $8,477.73.
The employee pays $5,020.00 of income tax. The contractor pays less, $3,559.47.
Two deductions cause this. The contractor deducts half of the self-employment tax, and the qualified business income deduction.
In total, the employee pays $9,610.00 of federal tax. The contractor pays $12,037.20.
The contractor must also pay estimated tax four times each year.
To compare your own numbers, go to paycheckcalchq.com.
Official sources
How we made this video
The script is written in ASD-STE100 Simplified Technical English: short sentences, one word for one meaning, and active voice. The voice is synthetic (Piper text-to-speech). The animation is drawn with code from the calculator's own results, so the numbers on screen match the calculator. We remake a video when a rate in it changes.
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