Salary vs. Contractor Calculator
Make the right career choice. Compare a full-time salary against a contracting rate with a true apples-to-apples breakdown of benefits, taxes, and expenses.
Salaried Employee
Contractor
The True Cost of Employment: A Guide to Salary vs. Contracting
Deciding between a full-time salaried position and a freelance contract can be one of the most significant choices of your career. A common mistake is to simply compare a salary to an hourly rate, but this is an apples-to-oranges comparison that ignores the hidden complexities of total compensation. Our Salary vs. Contractor Calculator is built to demystify this decision, providing a true apples-to-apples financial breakdown to help you make an informed choice.
A **salaried role** offers more than just a paycheck. The total compensation package often includes valuable, non-cash benefits like health insurance, retirement contributions (like a 401k match), paid time off, and bonuses. These perks have a significant dollar value that must be factored into the equation. Our calculator helps you quantify these benefits to reveal your true total compensation, giving you a complete picture of what an employer is providing.
On the other hand, a **contractor's hourly rate** is not pure profit. As a contractor, you are a business. From your gross revenue, you must pay for your own benefits, cover business expenses (software, marketing, insurance), and handle your own taxes, including the full self-employment tax. You also don't get paid for time off. This calculator helps you convert your contracting rate into an equivalent annual compensation by subtracting these costs, revealing a number you can directly and fairly compare to a salary. By understanding the true financial picture of both paths, you can negotiate better rates, plan for the future, and choose the career model that truly maximizes your earnings and fits your lifestyle.