Why is my take-home so much lower than my rate suggests?

Three stacked cuts: unbillable time (you sell ~1,200 hours, not 2,080), expenses off the top, then SE tax plus income tax. $75/hour routinely nets under $60k. The math isn't cruel, just honest.

Is this comparable to a W-2 salary number?

Almost, this shows federal take-home, but a W-2 job also includes employer-paid health insurance and retirement match. Add those costs to the freelance side, or use our W-2 vs 1099 tool for the direct conversion.

What are the biggest legal levers to increase take-home?

Deduct everything legitimate (the calculator's expense line does real work), fund a solo 401(k) to cut income tax, and past ~$80–100k profit, run the S-corp comparison.

Calculators

1099 take-home calculator

A $75/hour contract is not a $75/hour job. Expenses come off the top, then self-employment tax, then income tax. This shows what actually lands in your account, and the per-hour figure to hold next to a W-2 offer.

Your numbers

Contract hourly rate

What the client pays per billed hour.

Billed hours per week

Hours you actually invoice, not hours you work.

Weeks worked per year

52 minus vacation, gaps between contracts, and dry spells.

Annual business expenses

Deductible costs: gear, software, insurance, accounting, coworking.

What the ledger says

Lands in your account$5,906per month

Annual take-home: $70,867
Real hourly (compare with W-2): $51.35
Gross revenue: $103,500
Federal tax (SE + income): $24,633
Effective tax rate on gross: 23.8%

Estimate, not advice

The formula

Gross = rate × hours × weeks. Profit = gross − expenses. Tax = the same 2025 single-filer engine as the quarterly calculator (SE tax + federal brackets). Take-home = profit − tax.

What this ignores

State and local tax, health insurance premiums, retirement savings, QBI deduction, and filing statuses other than single. A W-2 comparison should also price the employer benefits you now buy yourself.

Uses 2025 IRS constants (standard deduction $15,000; Social Security wage base $176,100).

Field notes

Why is my take-home so much lower than my rate suggests?: Three stacked cuts: unbillable time (you sell ~1,200 hours, not 2,080), expenses off the top, then SE tax plus income tax. $75/hour routinely nets under $60k. The math isn't cruel, just honest.
Is this comparable to a W-2 salary number?: Almost, this shows federal take-home, but a W-2 job also includes employer-paid health insurance and retirement match. Add those costs to the freelance side, or use our W-2 vs 1099 tool for the direct conversion.
What are the biggest legal levers to increase take-home?: Deduct everything legitimate (the calculator's expense line does real work), fund a solo 401(k) to cut income tax, and past ~$80–100k profit, run the S-corp comparison.