If you agreed to $50/hr, then that is what they will pay you period. You are responsible for all of the taxes associated with the money you earn. They are responsible for providing you with a 1099 by Jan 31 for the previous year, the same way you previously received a W-2 from an employer. You will now have the responsibility of paying your taxes yourself, typically done quarterly, but also to pay full social security tax (when you work for someone as an employee you only pay half, and the employer pays half). How much you make will influence how much you need to pay each quarter. You might want to talk to an accountant to at least estimate this for you, because if you unerpay by too much at the end of the year, you might owe a penalty.