How this number is made
A 1099 hourly rate is not take-home pay. You pay both halves of Social Security and Medicare, then federal income tax, then whatever state and city tax applies, after the business expenses you can actually document. This page runs that year from an hourly rate, or from a lump sum. The other setting is a flat percent for contractors whose country is not the United States.
- Use the hours you expect to bill, not a 40-hour week you will not invoice. Unpaid weeks come out of the week count.
- List expenses that belong on Schedule C: software, insurance, supplies, a home-office deduction, and business miles. The mileage line is miles times the cents you type.
- Pick the state. The percent is a simplified preset. Replace it if you know your bracket. Add a local percent only if your city taxes wages or profit. Most cities do not.
- Add W-2 wages if you also have a job. They use up the Social Security wage base and push the federal bracket. Leave them at zero if the 1099 is your only income.
Formula
Profit = billings − VAT − withholding − platform fee − transfer fee − expenses. Self-employment tax = 12.4% + 2.9% on profit × 0.9235, with Social Security capped at the 2026 wage base of $184,500 after W-2 wages. Federal income tax uses 2026 brackets on profit + W-2 wages − half of self-employment tax − the standard deduction, minus the tax on the W-2 wages alone. State and local tax = profit × the percents you set.
Worked example
$50 an hour for 40 hours and 48 weeks is $96,000 billed. Software $1,200, insurance $1,800, and 1,000 miles at 76¢ are $3,760 of expenses. Profit is $92,240. Self-employment tax is $13,033.10. Federal income tax, single, is $10,029.16. Georgia’s 5.19% preset is $4,787.26. Local tax is zero. You keep $64,390.49, or $33.54 an hour. A rough quarterly set-aside is $6,962.38.
Questions
Does this include the qualified business income deduction?
No. Many people who qualify owe less federal income tax because of it, and some do not qualify. Leaving it out makes the federal set-aside a little high on purpose.
Where is the page for my hourly rate or my state?
The 1099 index has a worked year for common hourly rates, with no state tax, and a page for each state at $50 an hour. Those pages leave expenses at zero so the rates compare. Use this calculator when you need expenses, a city tax, or a W-2 job in the same figure.
What about city tax?
The state preset is not a city tax. Philadelphia, New York City, and a number of Ohio cities tax residents or people who work there. Type that rate in local income tax. This page does not keep a city table, because those rates and the wage base they use are local law.