1099 vs. W-2 jobs: what Texas job seekers should know
Lots of commission and field-sales jobs in Dallas–Fort Worth are posted as "1099." Here is what that means for your paycheck, your taxes and your benefits, in plain words.
The short version
| W-2 employee | 1099 independent contractor | |
|---|---|---|
| Taxes withheld from pay | Yes, by the employer | No, you pay your own |
| Social Security and Medicare | Split with the employer | You pay both halves (self-employment tax) |
| Benefits like health insurance or PTO | Often offered | Usually not |
| Control over how and when you work | Employer directs the work | More independence |
| Business expenses | Often reimbursed | Usually yours, and may be deductible |
How the IRS decides which one you are
It is not just what the offer letter says. The IRS looks at the whole relationship, grouped into three areas: behavioral control (does the company control how you do the work?), financial control (who pays expenses, can you profit or lose?), and the type of relationship (benefits, contracts, how permanent it is). See the IRS guide Independent contractor or employee?
Taxes on 1099 income
- Self-employment tax: the IRS sets it at 15.3% (12.4% Social Security plus 2.9% Medicare) on net earnings. A W-2 employee pays half of that and the employer pays the other half. Details at irs.gov.
- Federal income tax still applies on top of that.
- Texas has no state income tax, which helps, but federal taxes still add up.
- Quarterly estimated payments: because nothing is withheld, the IRS generally expects you to pay estimated tax during the year (Form 1040-ES). See Estimated taxes.
A simple habit: move a set share of every commission check into a separate savings account for taxes the day it lands. A tax professional can tell you the right amount for your situation.
Why so many sales jobs are 1099
Commission-only roles tie pay directly to results, and many companies set them up as contractor roles. That can mean a higher ceiling and more freedom, and it also means income that moves up and down. Learn how the different plans work in our commission pay explainer.
Questions to ask before you accept a 1099 role
- Is this 1099 or W-2, and will I get a contract in writing?
- How is commission calculated, and when exactly is it paid?
- Who pays for gas, mileage, phone and tools?
- Are leads provided, and what do new reps typically earn in the first 90 days?
- Is there training, and is it paid?
Is 1099 right for you?
It can be a great fit if you are a self-starter, comfortable with variable income, and organized about money. If you need steady, predictable pay and benefits right now, a W-2 role may be a better first step. Read commission sales careers to see if outside sales fits you.
See a real DFW example
This role is a 1099 contractor position with the pay structure shown up front:
Vertice Roofing · Dallas–Fort Worth, TX · 1099 contractor · Commission-only, 50–60% profit share
Roofing Sales Rep (DFW) – 50–60% Profit Share, Leads Provided
✓ Real job · Pay shown · Reply promisedOutside sales for a locally owned North Texas roofing contractor. Leads and weekly training provided, uncapped commissions.
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Post a job freeFAQ
Is a 1099 job a real job?
Yes. A 1099 role is independent contract work instead of employment. You get paid for results, but taxes are not withheld and benefits are usually not included.
How much should I set aside for taxes on 1099 income?
It depends on your income and deductions. Self-employment tax alone is 15.3% of net earnings per the IRS, plus federal income tax. Texas has no state income tax. A tax professional can give you an exact number.
Can a company choose 1099 or W-2 for me?
The label has to match the actual working relationship. The IRS looks at behavioral control, financial control and the type of relationship.