North Dakota 1099 vs. W-2 Calculator
North Dakota has a graduated state income tax with a top rate of 2.50%. 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 North Dakota.
As a W-2 employee
Take-home rate 82%
Take-home $61,389 Tax $13,611
Gross pay $75,000
FICA payroll tax (7.65%) $5,738
Federal income tax $7,670
North Dakota income tax $203
Take-home pay $61,389
As a 1099 contractor
Take-home rate 79%
Take-home $59,405 Tax $15,595
Gross pay (net profit) $75,000
Self-employment tax (15.3%) $10,597
Federal income tax $4,898
North Dakota income tax $100
Take-home pay $59,405
At the same gross pay, a W-2 employee takes home
$1,984 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.