$35/hour × 2,080 hours (a full-time employee year) is $72,800. But freelancers do not bill 2,080 hours. At a realistic 1,250 billable hours, $35/hour is $43,750 in revenue; after ~15% business costs and US self-employment tax, it compares to an employee salary of roughly $27,648 with benefits.
| Billable hours / yr | Revenue | After 15% costs | SE tax (US) | ≈ Employee salary equivalent |
|---|---|---|---|---|
| 1,000 h | $35,000 | $29,750 | $4,204 | $22,119 |
| 1,250 h | $43,750 | $37,188 | $5,254 | $27,648 |
| 1,500 h | $52,500 | $44,625 | $6,305 | $33,178 |
| 1,800 h | $63,000 | $53,550 | $7,566 | $39,813 |
Per period at 1,250 billable hours
- Per month: $3,646 revenue
- Per week (48 working weeks): $911
- Day rate (8 hours): $280
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.