How to read this
Total comp value is the apples-to-apples comparison number. W2 looks lower in cash but higher in benefits. 1099 looks higher in cash but you eat all the costs. Locum is wildly variable based on hours.
Tax structure differences
- W2: Employer covers 7.65% FICA. You owe income tax on full salary. Easy.
- 1099: You owe full 15.3% self-employment tax (employer + employee FICA). You can deduct business expenses on Schedule C. Solo 401(k) lets you contribute up to ~$70K/year (combined employee + employer).
- Locum (1099): Same as 1099 above, but locum agencies often provide travel, housing, malpractice, and licensing. Those are tax-free reimbursements (not income).
Decision factors beyond money
- PSLF eligibility: Only W2 employment at qualifying nonprofit/govt counts. 1099 and locum do not, even at qualifying organizations.
- Schedule control: 1099 and locum win. W2 wins on predictability.
- Benefits parking: Spouse's employer plan? 1099/locum become much more attractive.
- Career stage: New grads usually benefit from W2 mentorship. Experienced NPs can monetize independence via 1099/locum.
Tax math uses 2026 federal brackets and approximated state rates. Self-employment tax assumes no S-corp election. Actual outcomes depend on filing status, deductions, retirement contributions, S-corp/LLC structure, and many other factors. Consult a CPA who works with NPs/healthcare providers before making employment decisions.