freelance

Freelance, contract, and gig income get sold as a raise over a job at the same headline rate — no boss taking a cut. That's backwards. A W-2 employer doesn't just cut your paycheck; it also quietly pays HALF of your Social Security and Medicare tax on top of your salary, a cost you never see. A 1099 worker has no employer, so the full 15.3% self-employment tax — both halves — comes out of the identical gross dollars a W-2 employee only pays half of. This lesson compares take-home pay for the exact same income earned two ways, and prices two things freelancers routinely get blindsided by: the employer-equivalent share you must now fund yourself, and the estimated quarterly payments the IRS expects directly from you, since no payroll department is withholding it automatically. The simulator races a W-2 take-home line against a 1099 take-home line across a wide range of income, shading the gap between them, and marks the Social Security wage cap — the one point where the tax-only gap's growth actually eases. A third slider prices the employer benefits (retirement match, health insurance) a 1099 gig simply doesn't offer, for the full picture, not just the tax line.