Employee vs. Freelancer Calculator
Enter your employed salary and your freelance rate — and see what you actually take home in both scenarios.
EMPLOYED
Your average effective income tax rate on this salary.
NI, pension, health — your share. Typical: 6–13% depending on country.
FREELANCE
Often higher than employment — no employer-side deductions.
Full self-employed premium.
Software, tools, accountant, workspace.
ASSUMPTIONS
Share of available hours actually billed. New: 50–70 %. Established: 70–90 %.
Weeks you are generally available for work — leave & holidays are deducted separately.
How to compare employee vs. freelancer income
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Enter your current employed gross salary
Use your current annual gross salary as an employee. This is the baseline the calculator compares against — the freelance equivalent must beat this net to make the switch worthwhile.
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Enter your target freelance hourly rate
Either pick a rate based on market research or use the output of our Hourly Rate Calculator. Realistic ranges for solo freelancers in 2026: developers $60–150/hour, designers $50–120/hour, copywriters $50–100/hour, consultants $100–250/hour.
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Set realistic billable hours and tax rate
Most freelancers achieve 800–1,200 billable hours per year, not the 1,760 of an employee. Set the right utilisation. Combined tax + self-employment + health insurance burden is 30–45 % for typical freelancers; employed people pay similar gross but the employer covers half of social security.
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Add freelance-specific costs (health insurance, retirement, tools)
Freelancers pay their own health insurance and retirement contributions in full. Plus tooling subscriptions, accounting, professional insurance, coworking and continued education. Realistic overhead: $5,000–15,000/year extra vs. an employee.
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Compare net income and decide
The calculator outputs your true freelance net income vs. your employed net. The freelance number should clearly exceed the employed number to justify the switch — accounting for risk, no paid leave, no employer benefits. A 20 % net premium is the typical rule of thumb for making it worth the trade-off.
What the calculator accounts for
On the employee side we subtract income tax and your share of payroll-funded benefits — items your employer typically helps cover, like health insurance contributions, retirement, and unemployment. On the freelance side we work from your hourly rate, your billable utilisation (how many of your weekly hours are paid), income tax, and the full cost of your own health insurance, retirement contributions, and time off. The calculator surfaces what most freelancers miss on a rate card: unbilled hours and self-funded benefits are the difference between a high rate and a comparable take-home.
Why hourly rates mislead
A $100/hour rate sounds like a six-figure salary. In reality, after taxes, self-funded health coverage, retirement contributions, unbilled admin time, and the weeks each year you don't bill (holidays, sick days, marketing, dry spells), the take-home is often closer to a mid-tier employee salary. The calculator shows what hourly rate you actually need to match an employed scenario at the same net. For the per-hour breakdown, see our freelance hourly rate calculator.
Accuracy notes
The calculator uses representative tax and benefit assumptions and produces a strong directional estimate — useful for comparing scenarios before you commit. For a binding number tailored to your jurisdiction (US 1099, UK self-employed, EU freelance status), talk to a tax advisor in your country. If you're about to make the leap, our freelance guides cover registration, bookkeeping, and the right insurance setup.