How to use employment & freelance calculators
An employee wage and a freelance billing rate are not directly equivalent. A contractor must usually fund unpaid administration, leave, equipment, insurance, taxes, and periods without client work from the billed rate.
Use gross-pay conversions for an initial comparison, then add benefits, expenses, local taxes, and risk before making a job or contracting decision.
A practical decision process
- Separate paid hours from billable client hours.
- Allow for unpaid leave and non-billable work.
- Add business expenses and a tax or profit reserve.
- Compare total compensation, not only the headline hourly figure.
Start with the calculator closest to the decision, then compare a related metric from the list above. Review the formula, example, assumptions, and limitations before using the result in a business decision.
For deeper context, continue to the calculator guides or review how the formulas are tested.
Guides and formulas for this topic
- Calculator guides — Include non-billable time, expenses and a reserve in rate planning.