FOR SMALL BUSINESS OWNERS DECIDING HOW TO STAFF A ROLE

What does this role actually cost — hired, or contracted?

Enter the same role two ways: a W-2 employee's wage plus the employer taxes, workers' comp, benefits and admin that come with it, and a 1099 contractor's rate for the same hours. See the fully-loaded cost of each, side by side, and the contractor rate at which the two are exactly the same.

Workers' comp premium calculator for the class-rate insurance cost that sits on top of payroll

Home care agency margin calculator for pricing an hourly caregiver bill rate from the loaded wage, payer by payer

Staffing markup calculator for pricing a placement you bill to a client, rather than staff yourself

Compare: this calculator vs. a flat burden-percentage rule of thumb.

Guide: how many weeks into the year does FUTA and SUTA stop accruing?

The role, priced two ways

Defaults are a worked example — a $28/hr full-time role against a $40/hr contractor at the same hours. Replace every rate with your own state's and your own policy's before relying on the result.

W-2 employee

1099 contractor

Ongoing annual gap (employee − contractor)

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The form opens on a worked example. Change the numbers to your own and press the button.

Common questions

Does this calculator tell me whether a worker should be a W-2 employee or a 1099 contractor?

No. Worker classification is a legal determination under the IRS common-law test (behavioral control, financial control, and the relationship type) and, in many states, a separate and stricter ABC test — getting it wrong carries real back-tax and penalty exposure regardless of which arrangement is cheaper. This tool assumes the classification question is already settled, or is being modelled hypothetically for both arrangements, and answers a narrower question: once you pay for the role either way, which one costs more, and by how much.

Why is FUTA and SUTA not just a flat percentage of wages?

Both are charged only on wages up to a wage base — $7,000 federally for FUTA, and a state-set amount for SUTA — so once a role's annual wages clear those bases, the rest of the year's wages owe no more of that particular tax. A full-time role clears both bases early in the year, which is why this calculator applies each rate to the wage base rather than to total annual wages.

Why are ongoing cost and year-one cost shown separately?

Recruiting, background checks, and onboarding time are one-time costs. A calculator that folds them into a flat annual rate overstates every year after the first. The ongoing figures are what the role costs every year after the first; the year-one figures add each side's one-time setup cost.

Where do the default tax and benefit rates come from?

They are illustrative starting points, not your figures. Employer FICA (7.65%) and the federal FUTA wage base ($7,000) are fixed by federal law; FUTA's net rate, SUTA's rate and wage base, and workers' comp all vary by state and, for workers' comp, by class code — replace them with your own state's rates and your own policy's rate before relying on the result.

Is my data uploaded anywhere?

No account and no network requests — the calculator runs entirely in your browser. None of the wages, rates, or hours you enter are sent anywhere or stored anywhere but this device. The optional usage counter records only which features were used and the day, never any of your numbers.

Does the break-even rate account for the contractor's own self-employment tax?

No, and it should not — this calculator answers what the role costs your business, not what a contractor takes home. A contractor's self-employment tax is their own cost of doing business, already reflected (or not) in the hourly rate they quote you; it is not a cost your business pays either way.