$80/hour × 2,080 hours (a full-time employee year) is $166,400. But freelancers do not bill 2,080 hours. At a realistic 1,250 billable hours, $80/hour is $100,000 in revenue; after ~15% business costs and US self-employment tax, it compares to an employee salary of roughly $63,196 with benefits.
| Billable hours / yr | Revenue | After 15% costs | SE tax (US) | ≈ Employee salary equivalent |
|---|---|---|---|---|
| 1,000 h | $80,000 | $68,000 | $9,608 | $50,557 |
| 1,250 h | $100,000 | $85,000 | $12,010 | $63,196 |
| 1,500 h | $120,000 | $102,000 | $14,412 | $75,835 |
| 1,800 h | $144,000 | $122,400 | $17,295 | $91,002 |
Per period at 1,250 billable hours
- Per month: $8,333 revenue
- Per week (48 working weeks): $2,083
- Day rate (8 hours): $640
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.