Why not just divide the salary by 2,080 hours?

Because 2,080 assumes every working hour is billable and that benefits are free. Do that math on a $100k job and you'll quote $48/hour, then discover you needed roughly $70+ to break even.

Is the employer FICA half really my problem as a contractor?

Yes. As a 1099 you pay both halves of Social Security and Medicare through self-employment tax. The employer half that was invisible on your W-2 becomes a line on your own tax return.

What's a reasonable rule of thumb if I don't want the full math?

Salary ÷ 1,000 as an hourly floor ($100k → $100/h) gets you surprisingly close to this calculator's output for typical benefits and billable ratios. But run the real numbers before quoting.

Calculators

W-2 vs 1099 rate calculator

Recruiters love converting a salary to an hourly rate by dividing by 2,080. That number is a trap: it ignores the employer's hidden spend on you, and pretends you can bill 40 hours, 52 weeks a year. This does the conversion honestly.

Your numbers

W-2 base salary

The salary you're comparing against or walking away from.

Employer-paid health premium / month

What the employer pays, not your paycheck deduction. US average is roughly $550–700 for single coverage.

401(k) match

Employer match as a percent of salary. 3–5% is typical.

Billable hours per week as a contractor

Honest number. Most independent contractors bill 25–30 of a 40-hour week.

Weeks worked per year

52 minus vacation, gaps, and dry spells.

What the ledger says

Equivalent 1099 rate$104per hour

True employer cost (what you must replace): $118,850
Hidden benefits value on top of salary: $18,850
Annual 1099 revenue to match: $118,850
Billable hours per year: 1,150

Estimate, not advice

The formula

True cost = salary + employer FICA (7.65%) + 12 × health premium + match. Equivalent rate = true cost ÷ (billable hours × weeks worked). The famous ÷2,080 shortcut understates this by 30–50%.

What this ignores

Paid family leave, equity, bonuses, disability/life insurance, and the value of employment-law protections. It also assumes your health plan costs what the employer's did, marketplace plans often cost more for less.

Field notes

Why not just divide the salary by 2,080 hours?: Because 2,080 assumes every working hour is billable and that benefits are free. Do that math on a $100k job and you'll quote $48/hour, then discover you needed roughly $70+ to break even.
Is the employer FICA half really my problem as a contractor?: Yes. As a 1099 you pay both halves of Social Security and Medicare through self-employment tax. The employer half that was invisible on your W-2 becomes a line on your own tax return.
What's a reasonable rule of thumb if I don't want the full math?: Salary ÷ 1,000 as an hourly floor ($100k → $100/h) gets you surprisingly close to this calculator's output for typical benefits and billable ratios. But run the real numbers before quoting.