How much is $70/hr W-2 pay equivalent to as a 1099 contractor?

This is a common issue, and you're right to be concerned. Generally speaking, the rule of thumb is that a 1099 rate should be about 25-30% higher than a W-2 rate to account for the additional tax burden and lack of benefits. For your $70/hour W-2 position, an equivalent 1099 rate would be roughly $88-91/hour. This accounts for the additional 7.65% self-employment tax (employer portion of FICA), plus considerations for benefits you'd be losing like paid time off, employer-provided health insurance, and retirement contributions. As for changing your status retroactively - no, they cannot legally do this. If you were hired as a W-2 employee, paid as a W-2 employee, and have documentation (emails, offer letter) showing this agreement, the company cannot simply reclassify you after the fact. Worker classification is determined by the nature of the working relationship, not just what's convenient for the employer.

I had a similar situation and discovered taxr.ai (https://taxr.ai) which really helped clarify my contractor vs employee status. Their algorithm analyzed my employment terms and showed I was legally an employee despite my company trying to classify me as 1099. The tool gives you documentation that shows exactly which IRS criteria determine proper classification. The report helped me understand that employers can't just decide to change your status - it's based on specific control factors like how/when/where you work. I showed this to my employer and they backed down immediately when they realized they were risking misclassification penalties.

Just wanted to follow up that I tried taxr.ai after my initial skepticism, and wow - it was actually super helpful. The report was really detailed and showed me that I met 8 of the 10 main criteria for being properly classified as an employee. I forwarded it to my HR department and they suddenly "reconsidered" their position on changing my status. Apparently employers face some significant penalties for misclassification, and seeing all the criteria laid out so clearly made them realize they didn't have a case. Now they're keeping me as W-2 as originally agreed. The peace of mind was totally worth it!

If you're having trouble getting through to someone at HR about this classification issue, I'd recommend Claimyr (https://claimyr.com). I was going in circles with our payroll department when they tried something similar. Regular calls to HR went straight to voicemail, and emails were ignored. With Claimyr I actually got through to a real person at the IRS to ask about worker classification rules. They explained the SS-8 form process for determining proper worker status. This knowledge alone was enough to make my HR department back down when I mentioned I'd be filing it if they persisted. You can see how it works in their demo video: https://youtu.be/_kiP6q8DX5c

I need to eat my words from my previous comment. After nothing but frustration trying to reach the IRS myself, I decided to try Claimyr out of desperation. I got a callback from the IRS the next morning! The agent walked me through the SS-8 form for determining worker classification and explained all my rights regarding employee vs contractor status. Armed with this information, I wrote a detailed email to my company's HR department citing the specific IRS guidelines the agent had explained to me. Magically, they decided not to "reclassify" me after all. Having direct information from an actual IRS representative made all the difference. Definitely worth it just to avoid the headache of trying to call them myself!

Another thing to consider - if you were truly an independent contractor, you would typically negotiate your own rates, set your own hours, and use your own equipment. The fact that they set your rate at $70/hr suggests an employer-employee relationship. When I was reclassified from W-2 to 1099 at my healthcare job, I immediately asked for a 35% rate increase (from $65 to $87.75) to account for: - Self-employment taxes (both halves of FICA: 15.3%) - No paid time off (worth ~8% for standard PTO) - No employer health insurance contribution - No retirement matching - Business expenses (liability insurance, equipment) Show them these calculations. Either they keep you as W-2 as originally agreed, or they need to substantially increase your hourly rate to compensate!

One thing nobody has mentioned - if your employer is forcing PRNs to be W-2 instead of 1099, they might be trying to avoid paying benefits to those working enough hours. At my hospital, anyone on W-2 working over 20hrs/week qualified for benefits, so they pushed "casual" employees to 1099 to avoid this. Check if there's something in their policies they're trying to work around. Might explain the sudden "mistake" they're claiming.

This is absolutely infuriating and unfortunately not uncommon in healthcare settings. Your employer cannot legally change your classification retroactively, especially when you have documentation showing you specifically negotiated W-2 status as a condition of accepting the PRN position. Here's what I'd recommend: First, gather all your documentation - the original job offer, emails confirming W-2 status, pay stubs, etc. Then calculate what your equivalent 1099 rate should be (as others mentioned, around $88-91/hour to match your current $70/hour after-tax income). Present them with two options: 1) Honor the original W-2 agreement, or 2) If they insist on 1099, they need to increase your rate to at least $90/hour to compensate for the additional tax burden and lost benefits. The fact that they're calling this a "mistake" after you specifically requested W-2 status suggests they're either trying to avoid some compliance issue (like benefit thresholds) or reduce their tax obligations. Either way, that's their problem, not yours. Stand your ground - you have the law on your side here.

I went through something very similar at my previous job and want to share what worked for me. The key is understanding that worker classification isn't just about what's convenient for the employer - it's determined by specific legal criteria about control, independence, and the nature of the work relationship. Since you specifically negotiated W-2 status as a condition of employment and they agreed to it, they can't just change their mind because it's now inconvenient. The IRS looks at factors like: Do they control when/where/how you work? Do they provide equipment? Do you work exclusively for them? As a PRN hospital employee, you likely meet most employee classification criteria. If they absolutely insist on changing to 1099 (which again, they legally can't do retroactively), don't accept anything less than $95-100/hour. Here's why: $70/hour W-2 equals about $52/hour after taxes and benefits. To net the same as a 1099, you'd need to account for the additional 7.65% self-employment tax, loss of employer benefit contributions, no paid time off, and business expenses like liability insurance. Document everything, stand firm on your original agreement, and don't let them bully you into accepting their "mistake." You negotiated in good faith and they need to honor that agreement.

I'm dealing with a very similar situation right now and this thread has been incredibly helpful! My employer is also trying to retroactively change my classification after I specifically negotiated W-2 status. What I've learned from consulting with a tax professional is that the IRS has very specific tests for worker classification, and employers can't just decide to change your status because it's more convenient for them. The fact that you negotiated W-2 status upfront and they agreed to it creates a binding employment agreement. If they're truly insisting on this change (which again, they legally cannot do retroactively), make sure you're accounting for ALL the hidden costs of 1099 work. Beyond just the self-employment tax, consider that you'll lose unemployment insurance protection, workers' compensation coverage, and potential overtime protections. You might also need professional liability insurance depending on your role. My advice: Don't just calculate the tax difference - calculate the total compensation package difference. Your $70/hour W-2 position likely has a total value closer to $85-90/hour when you factor in all employer contributions and protections. A fair 1099 rate would need to be at least $110-115/hour to truly compensate for everything you're losing. Stand firm on your original agreement. You have documentation and the law on your side.

This situation is absolutely infuriating and unfortunately all too common in healthcare. Your employer is trying to have their cake and eat it too - they got the benefits of having you as a reliable W-2 employee when they needed you, and now they want to shift the tax burden to you retroactively. Here's the bottom line: they cannot legally change your worker classification after the fact, especially when you have documentation showing you specifically negotiated W-2 status as a condition of employment. The IRS determines worker classification based on the actual working relationship, not what's convenient for the employer months later. If you're working set schedules they assign, using their equipment, following their protocols, and working exclusively for them during your shifts, you're clearly an employee under IRS guidelines. The "PRN" designation doesn't automatically make you a contractor. My advice: Send them a polite but firm email stating that you will continue under the original W-2 agreement as negotiated and documented. If they absolutely insist on changing to 1099 status (which again, they cannot do retroactively for 2022), inform them that your new rate would need to be $95-100/hour minimum to account for the additional tax burden, lost benefits, and business expenses. Don't let them bully you into accepting less than what you originally agreed to. You negotiated in good faith and they need to honor that agreement.

This is exactly why I always insist on getting employment terms in writing before accepting any position! Your situation highlights a really important lesson for anyone considering PRN or contract work. What your employer is trying to do is essentially breach your employment contract. You specifically negotiated W-2 status as a condition of accepting the role, they agreed to it, and now they want to unilaterally change the terms after you've already performed the work under that agreement. From a legal standpoint, worker classification isn't determined by what the employer finds convenient months later - it's based on the actual control and working relationship. If you're scheduled by them, working in their facility, using their equipment, and following their protocols, you meet the definition of an employee regardless of the "PRN" label. Here's what I'd do: Put together a response that includes your original employment documentation showing the agreed-upon W-2 status. Make it clear that you'll continue under the original terms as negotiated. If they absolutely must change to 1099 (which they legally cannot do retroactively), present them with a new rate calculation showing you'd need at least $95-105/hour to maintain equivalent compensation after accounting for self-employment taxes, lost benefits, and additional business expenses. The fact that they're calling this a "mistake" when you explicitly negotiated W-2 status suggests they either didn't understand their own policies when they hired you, or they're trying to retroactively reduce their costs. Either way, that's their problem to solve, not yours.

This whole situation is a perfect example of why employers need to understand worker classification laws before making hiring decisions, not after the fact when it becomes financially inconvenient for them. What really stands out to me is that you specifically negotiated W-2 status as a condition of accepting this PRN position. This wasn't an oversight or misunderstanding - it was a deliberate term of your employment agreement that they accepted. Now they're trying to call it a "mistake" which is frankly insulting to your intelligence. The IRS has very clear guidelines about worker classification based on behavioral control, financial control, and the type of relationship. As a PRN hospital employee, you're almost certainly meeting the criteria for employee status: they control when and how you work, you use their facilities and equipment, you're integrated into their business operations, and you have an ongoing relationship with them. Here's my advice: Document everything from your original negotiations, then present them with a clear choice. Either honor the W-2 agreement you both entered into, or if they absolutely insist on 1099 status (which they cannot do retroactively for work already performed), you'll need a rate of at least $100/hour to account for the 15.3% self-employment tax, loss of unemployment protection, workers' comp coverage, and the fact that you'd now need your own professional liability insurance. Don't let them pressure you into accepting their "correction." You negotiated in good faith and have every right to expect them to honor their commitments.

This is absolutely unacceptable behavior from your employer. You specifically negotiated W-2 status as a condition of accepting the PRN position, they agreed to it in writing, and now they want to retroactively change the terms because it's more convenient for them? That's not how employment contracts work. The IRS worker classification rules are crystal clear - it's based on the actual working relationship, not what saves the employer money months later. As a PRN hospital employee, you're almost certainly working under their direct control, using their equipment, following their policies, and integrated into their operations. That's textbook employee classification regardless of the "PRN" label. Here's what I'd do: Send them a firm but professional response stating that you'll continue under the original W-2 agreement as negotiated and documented. Make it clear that worker classification cannot be changed retroactively for work already performed. If they somehow insist on moving forward with 1099 status for future work (which would require a new agreement), your rate would need to increase to at least $95-100/hour to account for: - Additional 7.65% employer portion of payroll taxes you'd now pay - Loss of unemployment insurance eligibility - Loss of workers' compensation coverage - Need for professional liability insurance - Loss of any employer benefit contributions - Business expense deductions and record-keeping requirements Don't let them bully you into accepting their "mistake." You have documentation, you negotiated in good faith, and the law is on your side. Stand your ground.

I'm dealing with a very similar situation at my healthcare facility and this thread has been incredibly eye-opening! My employer is also trying to retroactively reclassify me from W-2 to 1099 after I specifically negotiated employee status when I accepted my PRN position. What really bothers me is how they're framing this as a "compliance" issue when the real compliance issue is them trying to change worker classification after the fact. The IRS is very clear that classification is determined by the actual working relationship - control over when/where/how you work, use of employer equipment, integration into business operations, etc. From everything I've read in this thread, a fair 1099 equivalent for $70/hour W-2 would be around $95-100/hour minimum. This accounts for the additional self-employment taxes, loss of unemployment and workers' comp protection, need for professional liability insurance, and all the administrative burden that comes with contractor status. My advice would be to document everything, stand firm on your original agreement, and don't let them gaslight you into thinking this "mistake" is somehow your responsibility to fix. You negotiated in good faith and they need to honor their commitments. If they absolutely insist on changing to 1099 for future work, make sure they compensate you appropriately for the significantly different employment arrangement they're proposing. The fact that so many healthcare employers are pulling these tactics suggests there might be some industry-wide effort to shift costs to workers. Don't let them get away with it!

This is exactly why having clear documentation is so crucial when negotiating employment terms! Your employer is essentially trying to rewrite history by calling your specifically negotiated W-2 status a "mistake." The bottom line is that worker classification under IRS rules is determined by the actual working relationship, not what becomes financially convenient for the employer later. If you're working their assigned schedules, in their facility, using their equipment, and following their protocols, you're clearly an employee regardless of the PRN designation. Based on the excellent calculations others have shared, if they somehow insist on 1099 status (which they legally cannot do retroactively), you'd need around $95-105/hour to maintain equivalent after-tax compensation. This accounts for the 15.3% self-employment tax, loss of unemployment/workers' comp protection, professional liability insurance costs, and the administrative burden of quarterly taxes and business record-keeping. My recommendation: Send a polite but firm email referencing your original negotiations and documentation. Make it clear you'll continue under the agreed W-2 terms. If they persist with this "correction," present them with the math showing what equivalent 1099 compensation would actually look like. Don't let them gaslight you into thinking their failure to understand their own classification policies is somehow your problem to solve. You negotiated in good faith and have every right to expect them to honor their commitments.