$65/hour × 2,080 hours (a full-time employee year) is $135,200. But freelancers do not bill 2,080 hours. At a realistic 1,250 billable hours, $65/hour is $81,250 in revenue; after ~15% business costs and US self-employment tax, it compares to an employee salary of roughly $51,347 with benefits.
| Billable hours / yr | Revenue | After 15% costs | SE tax (US) | ≈ Employee salary equivalent |
|---|---|---|---|---|
| 1,000 h | $65,000 | $55,250 | $7,807 | $41,077 |
| 1,250 h | $81,250 | $69,062 | $9,758 | $51,347 |
| 1,500 h | $97,500 | $82,875 | $11,710 | $61,616 |
| 1,800 h | $117,000 | $99,450 | $14,052 | $73,939 |
Per period at 1,250 billable hours
- Per month: $6,771 revenue
- Per week (48 working weeks): $1,693
- Day rate (8 hours): $520
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.