Contractor Rate Calculator
Calculate the hourly rate you need as a contractor to match your employee salary. Includes self-employment tax, healthcare, retirement, and time off.
To convert an employee salary to an equivalent contractor rate, you need to add 30-50% on top to cover self-employment taxes (15.3% in the US), health insurance ($500-800/month), retirement contributions (10-15%), and unpaid time off. A $100,000 salary typically requires a contractor rate of $75-90/hour to maintain the same take-home pay and benefits.
Cost Breakdown
Hours Calculation
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Frequently Asked Questions
Why do contractors need to charge more than employees?
Employees receive benefits worth 20-40% on top of their salary: employer-paid taxes (7.65% for FICA in the US), health insurance, retirement matching, paid time off, equipment, and job security. Contractors pay for all of this themselves, plus have unbillable time for admin, marketing, and finding new clients.
What's the self-employment tax in the US?
In the US, self-employed individuals pay 15.3% in self-employment tax (Social Security + Medicare) on top of regular income tax. As an employee, your employer pays half of this (7.65%), but as a contractor, you pay the full amount. You can deduct half of this on your tax return.
How many billable hours should I plan for?
Most contractors realistically bill 25-35 hours per week even when working 40+. The rest goes to finding clients, admin, invoicing, taxes, learning, and breaks between projects. Planning for 35 billable hours is optimistic; 30 is more conservative and accounts for gaps between clients.
Should I charge different rates for different clients?
Yes, many contractors do. You might charge higher rates for: short-term projects (less stability), tight deadlines (opportunity cost), enterprise clients (more process/meetings), or specialized expertise. Use the minimum rate as your floor, not your standard rate.
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