California 1099 vs. W-2 Calculator
California has a graduated state income tax with a top rate of 13.30%. Combined with federal payroll and self-employment tax rules, that determines how much more a 1099 contractor needs to earn to match a W-2 employee's take-home pay in California.
As a W-2 employee
Take-home rate 79%
Take-home $59,496 Tax $15,504
Gross pay $75,000
FICA payroll tax (7.65%) $5,738
Federal income tax $7,670
California income tax $2,096
Take-home pay $59,496
As a 1099 contractor
Take-home rate 77%
Take-home $57,754 Tax $17,246
Gross pay (net profit) $75,000
Self-employment tax (15.3%) $10,597
Federal income tax $4,898
California income tax $1,751
Take-home pay $57,754
At the same gross pay, a W-2 employee takes home
$1,742 more than a 1099 contractor
This is because contractors pay the full 15.3% self-employment tax, while W-2 employees split the 7.65% FICA tax with their employer. Contractors typically need to charge more per hour to make up the difference.