$70/hour × 2,080 hours (a full-time employee year) is $145,600. But freelancers do not bill 2,080 hours. At a realistic 1,250 billable hours, $70/hour is $87,500 in revenue; after ~15% business costs and US self-employment tax, it compares to an employee salary of roughly $55,296 with benefits.
| Billable hours / yr | Revenue | After 15% costs | SE tax (US) | ≈ Employee salary equivalent |
|---|---|---|---|---|
| 1,000 h | $70,000 | $59,500 | $8,407 | $44,237 |
| 1,250 h | $87,500 | $74,375 | $10,509 | $55,296 |
| 1,500 h | $105,000 | $89,250 | $12,611 | $66,356 |
| 1,800 h | $126,000 | $107,100 | $15,133 | $79,627 |
Per period at 1,250 billable hours
- Per month: $7,292 revenue
- Per week (48 working weeks): $1,823
- Day rate (8 hours): $560
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.