Compare the estimated cost of a contractor and an employee using compensation, taxes, benefits, overhead, utilization, and engagement assumptions.
By Solopreneurship WikiReviewed September 2026
Wiki note: Cost is only one input: worker classification follows the real working relationship, and the two options create different commitments and management needs.
This planning tool compares explicit annual cash costs. It does not assume that a contractor and employee are interchangeable or that the cheaper option is legally available.
Contractor vs. Employee Cost CalculatorFree interactive tool
Calculate your result
Change the example assumptions to match your situation. Use consistent units and the same currency throughout.
Calculations run in your browser. Nothing is submitted.
Your result will appear here.
Enter your assumptions and select “Calculate result.”
Use source data where possible, record the date of your assumptions, and keep all monetary inputs in the selected currency. A precise-looking answer is only as reliable as the inputs behind it.
How to interpret the result
Compare cost per useful hour, but also consider continuity, supervision, knowledge retention, flexibility, and whether the work is recurring enough for employment. Get local legal advice before deciding classification.
Stress-test the decision
Run a conservative case, an expected case, and an optimistic case. Change one important assumption at a time so you can see what actually drives the answer. Define the action you will take if the conservative case occurs.
Worked example
A specialist contractor charges 85 per hour for 900 annual hours plus 2,000 in tools. An employee alternative has a 62,000 salary, 18% employer burden, 7,000 in benefits, 2,500 in equipment, and 5,000 in recruiting and onboarding.
Replace every example value with evidence from your own accounts, time records, quotes, contracts, or customer data. Save the result alongside those sources so it can be reviewed later.
Limitations
The calculator cannot determine worker status or include every payroll, leave, dismissal, insurance, pension, currency, or compliance cost. It is not legal, tax, or employment advice.
Calculator outputs are educational planning estimates. They are not financial, tax, legal, employment, investment, or medical advice and they do not guarantee a business outcome.
