$175/hour × 2,080 hours (a full-time employee year) is $364,000. But freelancers do not bill 2,080 hours. At a realistic 1,250 billable hours, $175/hour is $218,750 in revenue; after ~15% business costs and US self-employment tax, it compares to an employee salary of roughly $138,241 with benefits.
| Billable hours / yr | Revenue | After 15% costs | SE tax (US) | ≈ Employee salary equivalent |
|---|---|---|---|---|
| 1,000 h | $175,000 | $148,750 | $21,018 | $110,593 |
| 1,250 h | $218,750 | $185,938 | $26,272 | $138,241 |
| 1,500 h | $262,500 | $223,125 | $28,854 | $166,959 |
| 1,800 h | $315,000 | $267,750 | $30,049 | $202,181 |
Per period at 1,250 billable hours
- Per month: $18,229 revenue
- Per week (48 working weeks): $4,557
- Day rate (8 hours): $1,400
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.