Why 1099 take-home is harder to calculate than W-2
A W-2 employee gets paid post-tax. The employer withholds federal, state, FICA and sometimes local from each paycheck. The number that hits the bank is your actual take-home; you find out the precise tax owed only at filing time.
A 1099 worker gets paid pre-tax. Every invoice arrives gross. You have to do the tax math yourself, then put aside the tax portion in a separate account before you accidentally spend it. Most freelancers underestimate by 10-30% in their first year and then face a brutal April.
The four taxes that come out of 1099 income
- Self-employment tax (15.3%) on net earnings up to the SS wage base, then 2.9% above. See the SE tax guide for the full breakdown.
- Federal income tax (10-37% marginal) on taxable income (after standard deduction and QBI).
- State income tax (0-13.3%) in 41 states + DC.
- Local income tax in some cities (NYC, certain Indiana counties, certain Maryland counties, San Francisco). Not included in this estimate.
The "save 30% rule" — when it works and when it doesn't
The popular rule of thumb is "set aside 30% of every payment for taxes." For a middle-income freelancer in a no-state-tax state (TX, FL), 30% is roughly accurate. In California or New York at higher income, 30% is way too low — effective rates push above 40%. In a no-tax state with low income, 30% is too high.
Use this calculator to get a number tied to your actual situation, then back into a savings percentage. If take-home is $70k on $100k of net profit, your tax portion is 30%. Set up an automatic transfer of 30% of every payment to a "tax savings" account and you will never be surprised in April.
How to use this calculator
- Enter gross 1099 income. Total all 1099-NEC and self-employment cash you received this year before any expenses.
- Enter business expenses. Software, equipment, mileage, home-office portion, contractor payments — anything you would deduct on Schedule C.
- Pick your state. 50 states + DC. Nine states have no income tax; pick yours from the dropdown.
- Pick filing status. Single, MFJ, MFS, or HoH. Determines federal brackets and SE Additional Medicare threshold.
- Read your take-home. Headline number is annual take-home; underneath you see monthly and weekly equivalents plus the full breakdown.
FAQ
What is "take-home pay" for a 1099 worker?
It is what is left in your bank account after all federal and state taxes — self-employment tax, federal income tax, and state income tax — are subtracted from your net business profit. Unlike a W-2 salary, taxes are not withheld from each invoice; you see the gross and have to subtract the tax portion yourself.
Why is my take-home so much lower than expected?
Because you pay the full 15.3% self-employment tax on top of federal income tax. A W-2 employee never sees the employer half of FICA, but a freelancer pays both halves. Then federal income tax (10-37% marginal) stacks on top, plus state income tax in 41 states.
Which states have no income tax?
Nine states currently impose no broad-based individual income tax: Alaska, Florida, Nevada, New Hampshire (wages), South Dakota, Tennessee, Texas, Washington (wages), and Wyoming. Moving to one of these can mean an effective raise of 5-13% on net income.
How accurate is the state tax estimate?
For flat-tax states (Pennsylvania, Illinois, North Carolina, Colorado, etc.) and no-tax states, accurate to the dollar. For graduated states (California, New York, Oregon, etc.) the calculator uses the top marginal rate as a conservative planning estimate. Per-bracket state logic is on the Pro roadmap.
Does this include local / city taxes?
No. Some cities and counties impose additional income tax (NYC ~3.9%, San Francisco gross receipts, certain Indiana counties, certain Maryland counties). Subtract those separately if applicable.
What about Social Security and Medicare on the W-2 side?
If you also have a W-2 job, the SE tax wage base coordinates with FICA already withheld from W-2 wages. This calculator focuses on pure 1099 income; for combined situations, use the Self-Employment Tax Calculator with the "other W-2 income" field.