Contractor-versus-Employee Cost Calculator

Business & Operations

Use the Contractor-versus-Employee Cost Calculator

Compare annual and productive-hour costs for an employee and an independent contractor, including employer contributions, benefits, paid leave, overhead, and administration.

Policy-aware Accessible PDF and Excel

Fully loaded annual costs
Productive-hour comparison
Contractor break-even pricing

Before you calculate

Compare the same role scope, expected output, and time horizon. Employee and contractor classification is a legal question, not a choice produced by this cost model.

What this calculator covers

Inputs you can model

Currency
Employee annual salary
Employer payroll-contribution rate %
Annual employee benefits
Annual paid-leave cost
Annual employee equipment and overhead
Employee productive hours per year
Contractor annual fee
Annual contractor administration cost
Contractor productive hours per year

Results you can review

Lower-cost option
Total employee cost
Total contractor cost
Contractor cost difference
Contractor difference %
Employee cost per productive hour
Contractor cost per productive hour
Break-even contractor annual fee
Break-even contractor hourly rate
Annual savings

Method, policy basis, and limitations

How the estimate is built

The employee side adds salary, user-supplied employer contributions, benefits, paid leave, equipment, and overhead. The contractor side adds fees and administration, then both are normalized by productive hours.

Important limitation

Do not use this calculator to classify a worker. Employment status depends on the real working relationship and applicable law. Taxes, severance exposure, intellectual property, continuity, supervision, insurance, and compliance risk are not fully valued.

Your inputs

Enter the values you know. Required fields should be completed first, and optional fields can be left blank if they do not apply to your situation.

Preparing your input checklist Visible required fields are checked as you complete them.

Employee cost

Include employer-borne costs as well as salary so the comparison is economically meaningful.

Currency Required

Employee annual salary Required Accepted range: 0 to 10,000,000,000.

Employer payroll-contribution rate % Required Use a verified blended rate for employer payroll taxes and statutory contributions. Accepted range: 0 to 100.

Annual employee benefits Required Accepted range: 0 to 10,000,000,000.

Annual paid-leave cost Required Accepted range: 0 to 10,000,000,000.

Annual employee equipment and overhead Required Accepted range: 0 to 10,000,000,000.

Employee productive hours per year Required Exclude holidays, paid leave, training, and expected non-productive time. Accepted range: 1 to 8,760.

Contractor cost

Include administration and use realistic billable or productive hours for the same work scope.

Contractor annual fee Required Accepted range: 0 to 10,000,000,000.

Annual contractor administration cost Required Accepted range: 0 to 10,000,000,000.

Contractor productive hours per year Required Accepted range: 1 to 8,760.

Calculating and validating policy inputs...

Your decision view will appear here

Run the calculator to see the planning signal, key measures, reconciliation detail, and any schedules or stress scenarios returned for these inputs.

Your results

The top cards show the most important answers first. Detailed schedules, scenario tables, and supporting notes appear underneath for deeper review.

Planning estimate

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