Freelancer vs Employee Cost Calculator

Work out freelancer vs employee cost instantly with clear inputs, formula shown and shareable results.

About Freelancer vs Employee Cost Calculator

A freelancer's day rate looks expensive against a salary until the salary is fully loaded and divided by actual productive days. The break-even day count is the decision rule: below it, contracting is cheaper; above it, employing is cheaper and gives you continuity too.

Formulas

Fully loaded employee cost

Loaded = Salary x (1 + Benefits load %)

Break-even days

Break-even = Fully loaded employee cost / Freelancer day rate

Worked example

With the default values below, Freelancer vs Employee Cost Calculator returns Freelance cost less employee cost of -$88,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Employee annual salary: 1,600,000
Benefits and employer taxes: 28
Freelancer day rate: 14,000
Days of work required per year: 140

Results

Freelance cost less employee cost: -$88,000.00
Fully loaded employee cost: $2,048,000.00
Total freelancer cost: $1,960,000.00
Days at which freelancing costs the same as employing: 146.3

Step by step

1Values used
2Fully loaded employee cost
3Break-even days
4Freelance cost less employee cost= -88,000.00
5Fully loaded employee cost= 2,048,000.00
6Total freelancer cost= 1,960,000.00
7Days at which freelancing costs the same as employing= 146.3

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Why use 220 productive days?

Because 260 working days less leave, public holidays, sickness and training leaves roughly 220. Using 260 understates the true daily cost of an employee.

What non-cost factors matter?

Continuity, retained knowledge, availability at short notice, and the employment status risk of engaging a long-term contractor as if they were staff.