W-2 vs 1099 Tax Differences: Which Is Better for Your Net Pay?
Published on 2026 Financial Guides | Smart Paycheck Team
Choosing between a W-2 traditional employment role and a 1099 contractor position significantly affects your annual take-home pay and tax filing duties.
The Self-Employment Tax Factor
As a 1099 contractor, you must pay the full self-employment tax (covering both employer and employee portions of Social Security and Medicare), whereas W-2 employers split this cost.