Business tools
Employee vs. Contractor Cost Comparison
Compare employee and contractor costs using your own salary, benefits, payroll burden, hourly-rate and working-time assumptions.
Use the same currency throughout. Optional costs count as zero; employee time defaults to 52 weeks and 40 hours, and contractor time to 48 weeks and 40 hours.
The calculation runs locally in your browser. No input values are saved or sent to a server.
Compare estimated annual staffing costs.
Employee and contractor example
An $80,000 salary, 10% payroll burden, $8,000 benefits and $4,000 in other annual costs total $100,000. A $60/hour contractor working 40 hours for 48 weeks with $2,000 in annual fees costs $117,200. The employee has the lower estimated annual cost by $17,200 under those assumptions.
About this calculator
What the costs include
Employee cost includes salary, employer payroll burden, benefits and other employer-paid costs. Contractor cost includes hourly fees plus agency, platform, administrative or other costs.
Hourly cost and the comparison
Loaded hourly cost is total annual cost divided by the working hours entered. The annual cost difference is contractor cost minus employee cost; the percentage difference compares the gap with the lower-cost option. A percentage is unavailable when that option costs zero.
Cost is only one consideration
Employees and contractors may differ in availability, control, flexibility, continuity, skills, legal classification and other factors. A lower estimated cost is not a recommendation about the better employment decision.
Worker classification rules vary by jurisdiction. This calculator compares costs only and does not determine legal employment status.