Freelance vs Salary Calculator
The honest take-home gap after self-employment tax, healthcare, retirement, and the hours you don't actually bill.
Salary path
FICA, healthcare, 401k match, PTO. Typical: 25–35%.
Freelance path
Realistic: 20–30. Most assume 40, then burn out.
52 − vacation − dead weeks between contracts.
Typical: 27–35%.
Salary take-home
$68,400
+$26,600 hidden benefits = $121,600 total comp
Freelance take-home
$78,050
Gross $126,500 − $15,000 costs − 30% tax
Gap (freelance − salary)
+$9,650 / year
Break-even hourly rate at your billable hours: $98/hr
Conservative
$58,538
Realistic
$78,050
Aggressive
$97,563
Freelance bands swing on billable-hour realism more than rate.
Your hours are healthy. A $15/hr rate bump now compounds to ~$17K/yr — bigger than any tax optimization.
Hours sit in the realistic full-time-freelance range.
- Salary total comp = base × (1 + benefits %)
- Salary take-home ≈ base × 0.72 (after fed + state + FICA)
- Freelance gross = hourly × billable hrs/wk × weeks billed
- Freelance net = (gross − healthcare − retirement) × (1 − tax %)
- Break-even hourly = (salary take-home ÷ (1 − tax %) + costs) ÷ (billable hrs × weeks)
Common questions
Why does freelance need to gross so much more than salary?▾
Salaried W-2 gets ~30% of comp in invisible benefits: 7.65% employer FICA, healthcare ($6–18K/yr), 401k match, PTO, sick days, equipment, software. Freelance pays all of that out-of-pocket plus the other half of FICA. Rule of thumb: freelance hourly × billable hours must beat salary × 1.4 to break even.
What's a realistic billable-hour percentage?▾
55–70% of working hours actually bill. The rest is sales, admin, invoicing, sick days, dead time between contracts. Newer freelancers often assume 90%+ and blow up their model.
Should I include retirement contributions?▾
Yes — both sides. If your employer matches 5% and you don't replicate that as a freelancer (via Solo 401k or SEP-IRA), you're silently taking a pay cut even at higher gross.
What about freedom, control, and ceiling?▾
Not a calculator question, but: freelance has no ceiling and total schedule control. Salary has stability, benefits done for you, and no client-finding tax. The math only tells you the floor — life optimization is yours.