{
  "slug": "contractor-vs-employee-pay",
  "title": "Contractor vs Employee Pay Calculator",
  "heading": "Contractor vs Employee Pay Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/contractor-vs-employee-pay",
  "summary": "The contract rate you need to match a salaried offer.",
  "description": "A salary comes with benefits, paid leave and half your payroll tax. This converts a salary plus benefits into the equivalent contractor hourly rate.",
  "formula": "Rate = (salary + benefits) × (1 + extra tax) ÷ billable hours.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=contractor-vs-employee-pay",
  "inputs": [
    {
      "id": "salary",
      "label": "Salary offer",
      "kind": "number",
      "hint": null,
      "default": 120000,
      "unit": "$",
      "min": null,
      "max": null
    },
    {
      "id": "benefits",
      "label": "Benefits value",
      "kind": "number",
      "hint": null,
      "default": 18000,
      "unit": "$",
      "min": null,
      "max": null
    },
    {
      "id": "ptoDays",
      "label": "Paid time off",
      "kind": "number",
      "hint": null,
      "default": 22,
      "unit": "days",
      "min": 0,
      "max": null
    },
    {
      "id": "selfTax",
      "label": "Extra self-employment tax",
      "kind": "number",
      "hint": null,
      "default": 7.65,
      "unit": "%",
      "min": 0,
      "max": null
    },
    {
      "id": "hoursWeek",
      "label": "Billable hours per week",
      "kind": "number",
      "hint": null,
      "default": 36,
      "unit": null,
      "min": 1,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "rate",
      "label": "Equivalent hourly",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "day",
      "label": "Equivalent day rate",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "total",
      "label": "Total comp to replace",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "hours",
      "label": "Billable hours / yr",
      "format": "decimal",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Salary offer: 120000 $",
      "Benefits value: 18000 $",
      "Paid time off: 22 days",
      "Extra self-employment tax: 7.65 %",
      "Billable hours per week: 36"
    ],
    "outputs": [
      "Equivalent hourly: $86.69",
      "Equivalent day rate: $694",
      "Total comp to replace: $148,557",
      "Billable hours / yr: 1,714"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter salary offer ($).",
      "Enter benefits value ($).",
      "Enter paid time off (days).",
      "Enter extra self-employment tax (%).",
      "Enter billable hours per week.",
      "Read your equivalent hourly on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "salary": 72000,
        "benefits": 11000,
        "ptoDays": 13,
        "selfTax": 4.59,
        "hoursWeek": 22
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "salary": 120000,
        "benefits": 18000,
        "ptoDays": 22,
        "selfTax": 7.65,
        "hoursWeek": 36
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "salary": 192000,
        "benefits": 29000,
        "ptoDays": 35,
        "selfTax": 12.240000000000002,
        "hoursWeek": 58
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "How does the contractor vs employee pay calculator work?",
      "a": "A salary comes with benefits, paid leave and half your payroll tax. This converts a salary plus benefits into the equivalent contractor hourly rate. The underlying maths is: Rate = (salary + benefits) × (1 + extra tax) ÷ billable hours."
    },
    {
      "q": "What do I need to enter?",
      "a": "5 values: salary offer, benefits value, paid time off, extra self-employment tax, and billable hours per week. Each field starts with a sensible default, so you can change one number at a time and watch the result move."
    },
    {
      "q": "What does the equivalent hourly result mean?",
      "a": "It is returned as a money amount in US dollars and updates live as you edit the inputs, so you can compare two or three versions of a scenario in a few seconds."
    },
    {
      "q": "Is this calculator free, and do I need an account?",
      "a": "Yes, it's free, and no account is required. Nothing you type is stored on our servers — the maths runs entirely in your browser."
    },
    {
      "q": "How accurate is the result?",
      "a": "It applies the standard formula exactly, so the arithmetic is precise. Results are estimates before tax, fees, and inflation unless an input explicitly covers them."
    },
    {
      "q": "Who is this tool for?",
      "a": "It's built for anyone comparing money scenarios before committing — budgeting a payment, sanity-checking a quote, or seeing what a change in rate or term actually costs."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/freelance-minimum-day-rate",
    "https://www.revenuelab.fyi/toolbox/self-employed-quarterly-set-aside"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Contractor vs Employee Pay Calculator (https://www.revenuelab.fyi/toolbox/contractor-vs-employee-pay)"
}