Contractor vs Employee Cost Calculator

Compare the fully loaded annual cost of the same hours as an employee versus a contractor.

Inputs

Hourly rate

What both options pay per hour

Hours per week

Weekly hours for the role

Weeks per year

Weeks the work runs per year

Employer tax (%)

Payroll tax, benefits, insurance on an employee

Contractor buffer (%)

invoicing tax/overhead

Employee annual cost

$125,000.00

Contractor annual cost

$110,000.00

Difference

$15,000.00

positive = contractor cheaper

Enter a rate, hours, and both employer tax load and contractor buffer to compare the fully loaded annual cost of the same work under each model.

1Enter the hourly rate and weekly hours both options would pay, plus weeks per year.
2Enter your employer tax percentage (25% is a typical load) and the contractor buffer for invoicing overhead (10% is a common default).
3Compare the two annual costs and read the highlighted difference — positive means the contractor is cheaper for the same hours.