1-800Accountant Data Shows Nearly 1 in 3 Independent Businesses Spend More Than They Earn

The inaugural 1099 Earnings Report benchmarks revenue and expenses across 31 industries and finds a sharp divide between service work and product-based businesses.

NEW YORK, June 26, 2026 /PRNewswire/ -- Independent work is usually measured by how many people do it, not by what they earn. A new report from 1-800Accountant, America's leading virtual accounting firm, takes the opposite approach. The 1099 Earnings Report analyzes self-reported revenue and expense data across thousands of 1099 businesses, freelancers, and independent contractors, then ranks the results by industry the way a quarterly earnings report ranks a market. The finding that stands out: in 10 of the 31 industries measured, the typical business reports more in expenses than in revenue, meaning it runs at a loss on paper.

The report points to a clear split between two kinds of work. Knowledge and service industries earn more and keep more of what they earn, while product and inventory industries earn less and spend more to do it. Across all 31 industries, typical revenue and the expense ratio carry a strong negative correlation of -0.82, meaning the businesses that bring in the most also tend to retain the most.

Who Comes Out Ahead, and Who Falls Behind

At the top of the table, Wholesale and Distribution leads with about $77,000 in typical revenue against $20,300 in expenses, the widest margin of any industry measured. Healthcare, Construction, Engineering, and Insurance round out the leaders, each keeping roughly 45 cents or more of every dollar earned. The bottom of the table tells the opposite story. Apparel, Publishing, and E-Commerce all report median expenses well above median revenue, with the typical apparel business spending close to $4.00 for every $1.00 it brings in. The dividing line is largely inventory and production. Businesses that buy, hold, or manufacture physical goods carry costs whether or not the goods sell.

A Steady Floor or a Long Shot

The gap between typical and top earners follows the same pattern. In steady service fields such as Animal Services, top earners make about four times the typical operator. In Publishing, they clear roughly 144 times. Product industries produce a few large winners above a wide base of very small operators, while service and trade work offers a higher and more reliable floor.

"Earning well and keeping what you earn are two different things," said Mike Savage, Founder and CEO of 1-800Accountant at 1-800Accountant. "For product-based businesses especially, expense discipline and accurate bookkeeping are often the difference between a profitable year and a paper loss. The operators who track expenses as closely as revenue are the ones who turn independent work into durable income."

The full 1099 Earnings Report, including the complete industry table and methodology, is available on the 1-800Accountant blog.

About 1-800Accountant

1-800Accountant is America's leading virtual accounting firm, combining technology with experienced professionals to make accounting accessible and affordable for small business owners, entrepreneurs, freelancers, and independent contractors. The firm provides year-round support that includes bookkeeping, tax preparation, tax advisory, payroll, and entity formation. 

Contact: Wyatt Johnson

Content Manager, 1-800Accountant

920-807-9159 | media@1800accountant.com

SOURCE 1-800Accountant