Contractor vs Employee

The Contractor vs Employee Calculator provides a comprehensive comparison of total compensation and tax burden between working as an independent contractor (1099/freelance) and as a salaried employee (W-2). The comparison goes beyond gross pay to include employer benefits, self-employment tax, business deductions, and benefit costs. Enter the offered rates for both arrangements and the calculator shows total compensation, tax burden, health insurance costs, retirement contributions, and effective hourly rate for each. The side-by-side bar chart makes the true comparison clear. Contractors often command higher gross rates but must cover their own benefits, self-employment tax (both halves of FICA), and have no paid time off. This calculator helps you determine the contractor rate needed to match employee total compensation, which is typically 1.3-1.5x the equivalent salary.