Therapist contractor economics depend on more than the session rate
A therapist moving from W-2 employment to 1099 work may personally carry costs that were previously absorbed or subsidized by an employer. Depending on the arrangement, these can include professional liability coverage, licensing and continuing education, scheduling or EHR software, telehealth tools, office or equipment costs and health insurance. Enter only costs that actually apply to your situation rather than treating a generic profession estimate as automatic.
The profession label does not change the audited tax engine. Federal and state calculations still come from the selected state and the validated 2026 tax path. The profession page instead helps frame the expense and utilization assumptions that can move the contractor break-even point.
Sessions are not the same as billable working hours
Documentation, scheduling, care coordination, cancellations, marketing and unpaid time off can reduce the hours that generate contractor revenue. A therapist planning around 1,500 billable hours can need a meaningfully higher hourly target than someone using a 2,000-hour assumption. Use the billable-hours input to model the workload you realistically expect rather than a full employee schedule.
After the calculator solves the annual contractor gross needed to match the W-2 take-home estimate, it converts that amount into an hourly break-even target. That number is a financial floor. You can then decide whether the contract should pay an additional premium for benefit replacement, schedule uncertainty, client-volume risk, administrative work or the flexibility you value.
Use break-even before comparing a higher headline offer
A larger 1099 number can still be weaker than a W-2 package if it does not compensate for self-employment tax, business overhead, health coverage and unpaid non-clinical time. Compare take-home first, then inspect the annual and hourly break-even figures. If the offer is below that threshold, the tool shows the minimum contractor target needed to reach the modeled W-2 result.