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Financial Literacy 101

Self-Worth at Work Quick Reference

Two-axis pay framework, W2 vs 1099 math, the pre-raise checklist, and how to actually ask.

Chapter
05

How you get paid vs. who handles taxes

Hourly and salary describe how you're paid. W2 and 1099 describe who handles the taxes. Each combination has its own math.

Hourly W2

Per hour, taxes withheld, employer pays half FICA. Overtime above 40hrs.

Salary W2

Fixed annual, taxes withheld, full benefits. Default for knowledge work.

Hourly 1099

Per hour, no withholding, full SE tax. Bigger gross, smaller net.

Project 1099

Per deliverable, no withholding, full SE tax. Common in creative/consulting.

W2 vs 1099: what each really costs

W2 Employee

The employee path

  • Withholding handled. Federal, state, FICA come out automatically.
  • Half FICA paid for you. Employer covers 7.65% of payroll taxes.
  • Benefits included. Health, retirement match, PTO, life/disability.
  • Easy mortgage qualification. Two pay stubs + W-2 usually enough.

1099 Contractor

The contractor path

  • Quarterly estimated taxes. No withholding means you owe in chunks.
  • Full SE tax: 15.3%. On 92.35% of net earnings. Half is deductible.
  • Self-funded benefits. Health, retirement, PTO are yours to handle.
  • Mortgage qualification differs. Two years of returns, lender sees net (not gross).

The pre-raise seven-point checklist

1 Time in role.At least 12 months in this position.
2 Performance reviews.Recent reviews are positive or above-average.
3 Measurable wins.Specific accomplishments with numbers (revenue, time, retention).
4 Market research.At least 3 data points showing you're paid under market.
5 Company health.Not in layoffs, freeze, or major budget crunch.
6 Manager bandwidth.Available, not in crisis mode, has time to listen.
7 A specific ask.One number, not a range. "I am asking for $X."

How to open the conversation

"Over the past year, I have delivered X, Y, and Z. Based on market research for this role and my contributions, I would like to discuss raising my salary to $X."

What's absent matters. No "deserve," no "need," no "feel," no "fair." Replace those frames with contributions and a number. Then stop talking. Let the silence work for you. Bring a one-page summary of accomplishments and market data.

Market rate research sources

If you can't find 3 data points within 10% of each other, you don't have a market rate yet. Keep researching.

BLS Handbook

Median wages by occupation. Federal baseline.

Glassdoor

Self-reported salaries by role and company.

Payscale

Adjusted for experience, location, certifications.

Levels.fyi

Tech-focused. Total comp breakdowns by level.

LinkedIn Salary

Self-reported with location/experience filters.

Peers + associations

People in your role at other companies. Most reliable.

Your four action steps

1
Run the True Income Calculator.

Mode 01 for your total comp + true hourly. Mode 02 if 1099 is on the table.

2
Pull 3 market data points.

BLS plus two others. Confirm they cluster within 10% of each other.

3
Document 5 measurable wins.

Specific, with numbers. One page. Your evidence for the meeting.

4
Schedule the conversation.

30-min meeting. Practice the ask out loud. Bring your one-pager.

See your real total comp and the 1099-vs-W2 break-even math.