$110/hour × 2,080 hours (a full-time employee year) is $228,800. But freelancers do not bill 2,080 hours. At a realistic 1,250 billable hours, $110/hour is $137,500 in revenue; after ~15% business costs and US self-employment tax, it compares to an employee salary of roughly $86,894 with benefits.
| Billable hours / yr | Revenue | After 15% costs | SE tax (US) | ≈ Employee salary equivalent |
|---|---|---|---|---|
| 1,000 h | $110,000 | $93,500 | $13,211 | $69,516 |
| 1,250 h | $137,500 | $116,875 | $16,514 | $86,894 |
| 1,500 h | $165,000 | $140,250 | $19,817 | $104,273 |
| 1,800 h | $198,000 | $168,300 | $23,780 | $125,128 |
Per period at 1,250 billable hours
- Per month: $11,458 revenue
- Per week (48 working weeks): $2,865
- Day rate (8 hours): $880
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.