$90/hour × 2,080 hours (a full-time employee year) is $187,200. But freelancers do not bill 2,080 hours. At a realistic 1,250 billable hours, $90/hour is $112,500 in revenue; after ~15% business costs and US self-employment tax, it compares to an employee salary of roughly $71,095 with benefits.
| Billable hours / yr | Revenue | After 15% costs | SE tax (US) | ≈ Employee salary equivalent |
|---|---|---|---|---|
| 1,000 h | $90,000 | $76,500 | $10,809 | $56,876 |
| 1,250 h | $112,500 | $95,625 | $13,511 | $71,095 |
| 1,500 h | $135,000 | $114,750 | $16,214 | $85,315 |
| 1,800 h | $162,000 | $137,700 | $19,456 | $102,377 |
Per period at 1,250 billable hours
- Per month: $9,375 revenue
- Per week (48 working weeks): $2,344
- Day rate (8 hours): $720
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.