Working on 1099 vs W2 and self employment tax

Person working on 1099 is required to pay self employment tax. Self employment tax is 15.3. Self employment tax includes 12.4% social security tax on earnings up to $106,800 and 2.9% Medicare taxes.

Person working on W2 pays 6.2% social security tax on earning up to $106,800 and 1.45% Medicare taxes. Employer pays the same (6.2% social security tax on earning up to $106,800 and 1.45% Medicare taxes).

You can get current information regarding these taxes at http://ssa.gov/pubs/10003.html