Employee vs Contractor
Enter both offers side by side to see how the contractor revenue compares with the full value of the employment package.
What do you want to calculate?
Compare an employment offer with a contractor offer.
Employee offer
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Contractor offer
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Your comparison
Contractor offer is financially stronger
Based on the assumptions you entered, the contractor offer exceeds your recommended contractor threshold by approximately $28,750 per year before personal taxes.
Employee package
$110,000 /year
Contractor revenue
$161,000 /year
After business expenses
$156,000 /year
Recommended contractor threshold
$132,250 /year
Revenue needed to comfortably replace the employee package
Contractor rate required to match
$575 /day
$72 /hour
Based on 230 billable days (1,840 hours) a year
What this means
The employment offer is worth $110,000 a year once salary, bonus and benefits are combined. To comfortably replace that as a contractor — covering $5,000 of business expenses plus a 15% risk buffer — you would need to invoice about $132,250 a year, or $575/day. This does not automatically mean you should take one offer over the other: personal taxes, income stability, insurance, paid leave, pension arrangements and your own circumstances can all change the real-world outcome.
Summary of your calculation
- Employee package (salary + bonus + benefits)
- $110,000
- Contract revenue
- $161,000
- Business expenses
- $5,000
- Contract revenue after expenses
- $156,000
- Recommended threshold ((package + expenses) × 1.15)
- $132,250
- Required day rate
- $575
- Required hourly rate
- $72
Look beyond the headline number
A bigger number on the contract offer doesn't automatically mean it's the better deal. Compare like for like.
Salary isn't the full value
Employment includes pension, insurance, paid leave and bonuses on top of base pay.
Revenue isn't salary
Contract revenue pays your business first — expenses come off before you do.
Unpaid time matters
Holidays, sickness and gaps between contracts reduce contractor income.
Risk matters
Notice periods, income stability and legal responsibility differ significantly.
Taxes differ
Personal tax treatment varies by country and structure. This tool compares before tax.