Why does 1099 pay less than W-2 at the same gross?

A W-2 employee splits FICA with the employer. A 1099 contractor pays both halves (15.3% on 92.35% of net profit) plus income tax. The 20% QBI deduction recovers part of the gap, not all of it.

What 1099 rate matches a $120,000 salary in Texas?

To take home about $93,250 — the W-2 result on $120,000 in Texas — a contractor needs roughly $122,463 of net profit before expenses.

Does QBI always apply?

No. Specified-service trades phase out at higher incomes, and you need qualified business income. Kept applies a simplified 20% deduction for planning, not for filing.

Employment type

W-2 vs 1099 take-home pay

A $120,000 Texas W-2 keeps about $93,250. Matching that net as a 1099 contractor takes roughly $122,463 of profit before you buy your own benefits.

2026 paycheck inputs

Gross pay

Match the frequency below. Hourly is hours per week × 52. Dollar signs and commas are fine.

Frequency

Hours / week

State

City (optional local tax)

Filing status

Employment

Traditional 401(k) / year

Local tax override %

Take-home

$93,250

$7,771 a month · 77.7% of gross after tax

Monthly: $7,771
Biweekly: $3,587
Weekly: $1,793
Hourly take-home: $44.83
Effective tax rate: 22.3%
Federal marginal: 22.0%

Federal income tax	$17,570
State income tax	$0
Social Security	$7,440
Medicare	$1,740
Total tax	$26,750

Texas has no individual income tax. Property and sales taxes are not withheld from paychecks. Annual liability estimate for tax year 2026, not a W-4 withholding forecast.

State guide W-2 vs 1099

Switch the employment control to 1099 to add self-employment tax. Contractors should also price health insurance, retirement matching, unpaid time off, and quarterly estimated taxes — none of which appear on a W-2 stub.