Contractor vs Full-Time Salary Calculator
Compare a traditional W-2 salary to an independent contractor hourly rate. Factor unpaid time off, self-employment taxes, and health insurance so you know the minimum rate that truly matches corporate pay.
Inputs
Results
How this calculator works
- Enter the full-time base salary you want to match.
- Set weeks of unpaid time off and hours per week you can bill.
- Add health insurance overhead and self-employment tax percentage.
- Read the minimum contractor hourly rate required for parity.
Why this matters
Compare a traditional W-2 salary to an independent contractor hourly rate. Factor unpaid time off, self-employment taxes, and health insurance so you know the minimum rate that truly matches corporate pay.
Frequently asked questions
How do I convert a salary to a contractor hourly rate?
Start with the annual salary, add the value of benefits and employer-paid taxes you lose as a contractor, then divide by realistic billable hours after vacation and unpaid time off.
Why is a contractor rate higher than salary ÷ 2,080?
Contractors cover self-employment tax, health insurance, unpaid leave, equipment, and downtime. A simple salary ÷ 2,080 underprices the true cost of employment.
What self-employment tax rate should I use?
In the U.S., self-employment tax is typically about 15.3% on net earnings (Social Security + Medicare). This tool defaults to that baseline; adjust for your jurisdiction.
Does this include income tax?
It focuses on employment-cost parity (SE tax, benefits, unpaid time). You can raise the insurance and overhead inputs to buffer income tax differences.