W-2 to 1099 hourly rate in Texas
Texas has no state income tax, so the gap between a W-2 job and 1099 work comes almost entirely from federal tax, self-employment tax and the benefits you give up.
What Texas taxes change
- Texas does not tax wages or self-employment profit at the state level, so state tax is $0 on both sides of the comparison.
- That makes Texas the cleanest case: the extra rate you need comes from paying both halves of Social Security and Medicare, covering benefits yourself, and billing fewer hours than a salary pays for.
- The 20% QBI deduction can lower federal tax on 1099 income, which partly offsets the higher payroll tax.
Example rates for Texas
| W-2 salary | W-2 take-home | 1099 rate needed | Yearly revenue |
|---|---|---|---|
| $60,000 | $50,390 | $43.86 | $63,154 |
| $95,000 | $75,663 | $67.47 | $97,162 |
| $150,000 | $113,791 | $105.56 | $152,012 |
Single filer, 20 days off, 40 hours a week, 75% of hours billable (1,440 a year), QBI deduction on, no benefits, no business costs. Change any of these in the calculator.
What this does not cover
- Federal tax, self-employment tax and the QBI deduction use 2026 figures from the IRS and the Social Security Administration.
- These are estimates for one job, the standard deduction and no other income. Your own return may differ.
- Retirement savings, an S-corporation election and local taxes outside the ones named are not modeled.
See exactly how every number is built on the methodology page, or run your own numbers in the calculator.
Frequently asked questions
Does Texas have a state income tax?
No. Texas does not tax wages or self-employment profit at the state level, so state tax is $0 on both sides of the comparison.
Do I still pay tax as a Texas contractor?
Yes. Texas contractors still pay federal income tax and self-employment tax. The required rate in the table comes entirely from those taxes, the benefits you replace and your billable hours.