Freelance Salary Converter

The Freelance vs. Employee Math

Comparing an independent contractor's hourly rate directly to a salaried employee's hourly rate is a massive financial trap. Salaried employees are typically paid for 52 weeks a year, including vacations and sick days, and their employer covers a significant portion of their payroll taxes and health insurance.

Freelancers, on the other hand, only get paid when they are actively billing hours. You must account for unbillable administrative time (marketing, invoicing, client meetings), time off, and your own business overhead.

The True Net Income Formula

This calculator determines your true purchasing power by stripping away the mandatory leakages from your gross revenue:

$$ Net = (Rate \times Hours \times Weeks) - Expenses - Taxes $$

• Billable Hours: Do not put 40 hours here unless you are working 60+ hours total. Most freelancers average 25 to 30 billable hours a week.
• Weeks per Year: A standard year has 52 weeks. If you plan to take 4 weeks for vacation, holidays, and sick leave, input 48.
• Overhead Expenses: As a business, you pay for your own Adobe subscriptions, IDE licenses, web hosting, internet, and self-funded health insurance.