Leaving a salaried job to contract? A salary and a contract rate are not comparable until you add back the benefits you lose and the self-employment burden you take on. Enter your old package below to get the hourly and day rate you must charge to break even.
| Total W-2 value (salary + benefits) | — |
| Target contractor gross (with uplift) | — |
| Implied day rate (8h) | — |
This tool does math on the numbers you enter. It is not tax or financial advice and contains no built-in tax tables — estimate your own self-employment uplift (a tax professional can help). Figures are planning estimates only.
As an employee, your employer paid half of your 15.3% FICA tax, funded benefits, and covered paid time off. As a 1099 contractor you carry all of it, and only a fraction of the year is billable. This calculator adds the benefits you lose to your base salary, applies the self-employment uplift you enter, and divides by realistic billable hours so the rate truly replaces your old package.
A common rule of thumb is 25–30% more, because contractors pay the full 15.3% self-employment tax and self-fund benefits and time off. The exact uplift depends on the benefits you lose and your costs — enter them above rather than using a flat rule.
Anything the employer paid that you must now fund: health premiums, retirement match, paid time off value, bonuses, and employer-side payroll taxes. Add the dollar value to the benefits field.
Full-time contractors rarely bill all 2,080 hours; many bill 1,700–1,900 after holidays, contract gaps, and admin. Lower the field to see how downtime raises the rate you need.