Freelancers · Pricing & Tax Parity
The Freelance Rate Calculator
Two questions, one tool: is contracting worth it vs a salaried offer, and what must you charge per hour to hit the take-home you want — after taxes, health insurance and every unbillable hour.
True-Cost Contract Calculator
Compare a self-employed hourly rate against an employee (W2/EOR) rate — after taxes and self-paid health insurance — and find the exact break-even rate.
Break-even rate: $91.65/hr
To beat the $70/hr employee offer, ask for at least $92/hr as a contractor.
Contractor net / year
$121,560
on $192,000 gross
Employee net / year
$110,656
on $145,600 gross
121560
110656
Freelance Rate Calculator
Work backwards from the take-home you want: taxes, health insurance, weeks off, and non-billable time all push your required rate up.
Charge at least
$111.32/hr
Day rate (8h)
$891
Gross revenue needed
$160,294
Based on 1440 billable hours/year (40h × 48 weeks × 75% utilization), 32% effective tax, and $9,000 health insurance.
How it works
A contractor pays both halves of social/self-employment tax, buys their own health insurance, and isn't paid for time off. We convert each side to net take-home using an effective tax rate, then solve for the contractor rate that matches the employee's net:
break-even = ((employeeNet + health) ÷ (1 − contractorTax) + expenses) ÷ (hours × weeks)
Below the break-even rate, the lower-stress employee role actually pays more. Above it, contracting wins — by enough to justify the extra risk and admin.
FAQ
- Why fewer contractor weeks? Unpaid holidays, sick days, and admin mean fewer billable weeks (default 48 vs 52).
- What's in the tax rate? An effective combined rate (self-employment + income tax for contractors; income tax + employee social security for employees).
- Health insurance? Contractors self-pay; employees are typically employer-covered, so it's a real cash gap.
- All presets are editable — adjust them to your situation.
For AI agents & advisors
Two endpoints power this tool:
GET /api/contract.json?contractorRate=100&employeeRate=70&country=US
(both net incomes, break-even rate, verdict) and
GET /api/rate.json?desiredNet=100000&country=US
(required hourly/day rate). Declared in
/.well-known/mcp.json
and described in /llms.txt.