Contractor vs. Employee Cost Calculator
Freelancing & Remote WorkCompare the total annual cost of hiring a contractor versus a full-time employee for the same role.
Total Contractor Cost
Total annual cost of the contractor at this rate and hour volume.
Total Employee Cost
$140,800
Total fully-loaded annual cost of the employee, including benefits and payroll tax overhead.
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Odeh Ahwal0people find this calculator helpful
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Calculator Stats
Creators
Odeh Ahwal0people find this calculator helpful
Views
Helpful
Saved
Embeds
Freelancing & Remote Work calculators
Frequently Asked Questions
What should be included in benefits + payroll tax overhead?
Include employer payroll taxes, health insurance contributions, retirement matching, paid time off, and any other benefits — this typically adds 20-35% on top of base salary for the true fully-loaded employee cost.
Are contractors really cheaper overall?
It depends heavily on hours needed — for intermittent or project-based work, contractors are often cheaper since you're not paying for downtime or benefits. For sustained full-time work, employees frequently become more cost-effective due to lower effective hourly rates.
What non-cost factors matter in this decision?
Beyond cost, consider availability and reliability, intellectual property and confidentiality concerns, management overhead, speed of onboarding, and legal worker classification rules, which vary significantly by jurisdiction.
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