Contract pay calculator

Being a contractor has many legal and financial benefits over being an employee, as well as a sense of independence. However, contractors incur costs employees do not, which they have a right to charge employers for. Conversely, employees incur costs contractors do not, and contractors have a right to ask for the savings. Since it is difficult to remember all these costs, this calculator should help you negotiate with your employer a fair contracting rate.

Note that equivalent compensation means you get the same pay as an employee. You may be justified in asking for more. For example, if the work is short-term, specialized, or of a critical nature.

The calculator assumes that the employer pays:

Anything the employer no longer has to pay, or you now have to pay is added to your equivalent salary. Anything you save is subtracted.

INPUT

Annual wage if you were to work as an employee:


Employer provided health insurance coverage per month:


Employer coverage of health insurance:
%

Retirement account maximum contribution with employer matching as a percentage of your annual wage. For example, if the employer will match the first two percent you contribute, put 2 here. If contractors get this as well as employees, enter 0.
%

Retirement account employer matching as a percentage of your contributions. For example, if the employer puts in one dollar for every dollar you put in, enter 100 here
%

Retirement account first year vesting. For example, if you only get 1/3 of employer matching if you quit the first year, enter 33 here. If there is no vesting, enter 100.
%

Average employee yearly bonus (enter only the amount greater an employee gets if you also get this as a contactor):


Work days paid vacation to employees per year. Enter only the number of days greater an employee gets if you also get this as a contactor. If your pay as a contractor is not docked by taking the equivalent number of days of vacation, only enter those days that would be are docked, if any:


Work days paid sick leave to employees per year. Enter only the number of days greater an employee gets if you also get this as a contactor. If your pay as a contractor is not docked by taking the equivalent number of sick days, only enter those days that would be are docked, if any:


Work days in the year as a contractor (240 - paid holidays):


As a contractor, what uncompensated costs per year would you incur that you would not incur as an employee? Exclude health care.


As a contractor, what is the yearly financial positive benefit to being a contractor? For example, you may also wish to enter hourly rate * hours per year saved commuting if you can now telecommute rather than drive. In other words, how much more is the flexibility as a contractor worth to you?


As a contractor, what percent of your income do you pay as income tax?
%

OUTPUT

Extra Social Security tax that you would now need to pay yourself:


Unemployment tax your employer no longer has to pay (and thus should pay to you)

Extra Medicare tax that you would now need to pay yourself

Health insurance that you would now need to pay yourself

Retirement account compensation paid to employees, that should now be paid to you:

Value of paid vacation days to employees, that should now be paid to you:

Value of paid sick days to employees, that should now be paid to you:

Tax savings as a contractor:

Equivalent compenstation: