Washington D.C. 1099 vs. W-2 Calculator
Washington D.C. has a graduated state income tax with a top rate of 10.75%. 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 Washington D.C..
As a W-2 employee
Take-home rate 78%
Take-home $58,164 Tax $16,836
Gross pay $75,000
FICA payroll tax (7.65%) $5,738
Federal income tax $7,670
Washington D.C. income tax $3,429
Take-home pay $58,164
As a 1099 contractor
Take-home rate 75%
Take-home $56,421 Tax $18,579
Gross pay (net profit) $75,000
Self-employment tax (15.3%) $10,597
Federal income tax $4,898
Washington D.C. income tax $3,084
Take-home pay $56,421
At the same gross pay, a W-2 employee takes home
$1,743 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.