2026 Contractor vs Employee Calculator - Federal Estimate

The contractor side uses your hourly rate, billable hours, billable weeks and explicit annual business expenses. Self-employment Social Security and Medicare are estimated from net self-employment earnings, and the federal income-tax estimate uses the selected filing status and the 2026 standard deduction.

The employee side estimates federal income tax and employee FICA on salary, then adds only the employer benefits you explicitly value. Paid time off is treated as paid time that reduces worked hours; it is not added to annual salary a second time. State and local taxes, QBI, credits and several situation-specific deductions remain outside the model.

The contractor-versus-employee comparison is most useful when both sides include the costs that actually change. A contractor may have business expenses, unpaid administrative time and fewer billable weeks; an employee may receive paid time off, insurance or retirement benefits that do not appear in cash salary. Worker classification is also a legal question, not something that can be chosen solely because one tax result looks cheaper. Use the calculator for economic comparison and keep classification rules separate.