Contractor vs Employee Calculator
Compare contractor vs employee pay by estimating net yearly income after tax. This calculator helps you understand how hourly contract work compares to salaried employment when accounting for taxes and billable time.
Employee
Contractor
Employee net yearly income: $
Contractor net yearly income: $
Difference: $
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Frequently Asked Questions
Is it better to be a contractor or an employee?
Contractors often earn higher gross pay and flexibility, while employees benefit from stability, paid time off, and employer-provided benefits.
How much more should a contractor make?
Many contractors aim to earn 20%–50% more than an employee salary to compensate for taxes, benefits, and unpaid time.
Do contractors pay more taxes?
Yes. Contractors typically pay both income tax and self-employment tax, which increases their overall tax burden.
Does this include benefits?
No. This tool compares net cash income only and excludes benefits such as health insurance or retirement contributions.