Compare total costs of hiring a full-time employee versus independent contractor with taxes, benefits, and overhead analysis.
A salary and a contractor quote are not directly comparable. This calculator places them on a common cost basis by combining compensation with the tax, benefit, and overhead assumptions represented by its fields, then producing totals for the employee and contractor scenarios. It is for budgeting a hiring arrangement, not deciding a worker's legal status. The common surprise is that salary is only part of employee cost, while a contractor's fee may already reflect costs listed separately for an employee.
Enter the employee compensation and the employer-side cost assumptions requested by the form, such as employer taxes, benefits, and overhead. The calculator combines those components into the employee total and presents their effect on the comparison. Use employer-paid amounts only; deductions withheld from an employee's pay do not automatically represent an additional employer expense.
Enter the contractor's quoted compensation and any contractor-specific costs the form allows. The two scenario totals can then be compared as the cost difference under the entered assumptions. Keep the measurement period consistent: an hourly contractor quote and an annual employee salary are not comparable until expected contractor hours and the employee period describe the same span of work.
No. Cost has no authority over worker classification. In the United States, classification depends on the actual working relationship and applicable law, not the label in a contract or the cheaper total. Use this result only for budgeting. If status is uncertain, review current government guidance or obtain qualified advice before relying on the contractor scenario.
Yes, but only after both entries represent the same amount of work and the same time span. Account consistently for expected contractor hours and for employee paid nonworking time where the form permits it. If the hours, periods, or work scope do not align, no - the displayed difference is not a valid like-for-like cost comparison.
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