An employee costs far more than salary once taxes and benefits are added; a contractor's rate looks high but carries no load. Enter both to see which is cheaper — then model it fully.
Compare the fully-loaded cost of hiring versus contracting.
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A contractor's hourly rate is all-in — they cover their own taxes, benefits, equipment, and downtime. An employee's salary is only part of their cost: the employer adds payroll taxes, benefits, paid time off, and overhead, commonly 20% to 40% on top. So a contractor at a seemingly high rate can be cheaper than an employee on a lower salary once that load is counted, especially for part-year or variable work.
No — cost is just the starting point. Employees offer continuity, control, and deeper investment in the business; contractors offer flexibility and specialist skills without long-term commitment. There are also legal classification rules that determine who can be a contractor. Use this calculator to settle the cost question, then weigh the non-cost factors and check the classification rules that apply to you.
A ready-to-use spreadsheet (Excel & Google Sheets): fully-loaded employee cost versus contractor cost, the gap, and cost per hour for each, with adjustable hours and benefit loads — delivered instantly after checkout. AI-assisted, human-built; not legal, tax, or HR advice.
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