Freelancer vs Employee Salary Calculator

A freelancer needs roughly 1.5–2x the equivalent salary to match total compensation. At $80k employee salary, you need $120k–$160k freelance gross revenue to break even (accounting for self-employment tax, health insurance, no paid leave, and business expenses).

Freelancers pay self-employment tax (15.3% on net income up to Social Security limit), federal income tax (10–37% brackets), and state income tax. Total effective tax burden is typically 30–40% for freelancers earning $50k–$200k.

Freelancing can be very profitable if you bill 1,500+ hours/year at competitive rates, keep expenses low, and maximize business deductions. The key risk is income volatility — the feast-or-famine cycle. Many freelancers earn 30–100% more than comparable employees.