Cost of Hiring Calculator
W-2 employee vs 1099 contractor vs DIY — full cost stack including employer FICA, benefits, recruiting (amortized), onboarding loss, overhead, and your management time. Break-even bill rate and the 1.3–1.5× salary rule with actual math.
Role Compensation
W-2: annual gross salary. 1099: total annual contract value.
W-2 Benefits & Taxes
Standard: 7.65% (6.2% SS + 1.45% Medicare)
Recruiting & Onboarding
Job boards, recruiter fee, interview time
Weeks before fully productive
Overhead
Your Management Time
Your opportunity cost per hour
DIY Scenario
100% = full specialist skill
W-2 True Cost
$144,631
1.70× salary
1099 True Cost
$110,573
1.30× contract
DIY Cost
$62,400
opp. cost
Break-even bill rate
If the hire generates more than this per productive hour, they pay for themselves. If a contractor charges less for equivalent output, the 1099 is the better buy.
Analysis
The 1099 contractor is cheaper on paper, but factor in flexibility vs institutional knowledge.
W-2 vs 1099 cost delta: +$34,059 for W-2
W-2 Employee
1099 Contractor
Do It Yourself
cheapestThe Hidden Costs in a W-2
$6,503
Employer FICA
$16,704
Benefits total
$59,631
Total gap above salary
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