$100/hour × 2,080 hours (a full-time employee year) is $208,000. But freelancers do not bill 2,080 hours. At a realistic 1,250 billable hours, $100/hour is $125,000 in revenue; after ~15% business costs and US self-employment tax, it compares to an employee salary of roughly $78,995 with benefits.
| Billable hours / yr | Revenue | After 15% costs | SE tax (US) | ≈ Employee salary equivalent |
|---|---|---|---|---|
| 1,000 h | $100,000 | $85,000 | $12,010 | $63,196 |
| 1,250 h | $125,000 | $106,250 | $15,013 | $78,995 |
| 1,500 h | $150,000 | $127,500 | $18,015 | $94,794 |
| 1,800 h | $180,000 | $153,000 | $21,618 | $113,753 |
Per period at 1,250 billable hours
- Per month: $10,417 revenue
- Per week (48 working weeks): $2,604
- Day rate (8 hours): $800
Assumptions
Business costs 15% of revenue; self-employment tax 15.3% on 92.35% of profit (2026 Social Security wage base $184,500); the employee equivalent divides profit (less the employer-equivalent half of SE tax) by 1.25 to account for benefits an employer would provide — health cover, retirement match, paid leave. Income tax is similar in both cases and not included. Change any assumption in the hourly rate calculator or the take-home pay calculator.