Freelance vs. Full-Time Comparator
A salary is worth more than its headline number, and freelance revenue is worth less than its headline number. This puts both on the same footing so the comparison is honest.
The job is ahead by
$2,810
Per year, once benefits, expenses and tax are on the same footing.
Where freelance revenue actually goes
- Yours to keep$57,67068%
- Tax set-aside$21,33025%
- Business expenses$6,0007%
Per hour, and if revenue disappoints
- Employed, per hour$32.87
- Freelance, per hour$27.86
- Revenue 20% lower$45,260net
- Revenue 20% higher$70,080net
Read the full guide
Comparing the two fairly
Almost every freelance-versus-job comparison is wrong in the same direction. Someone earning a salary of fifty thousand hears that a freelancer in their field bills sixty, concludes that freelancing pays better, and hands in their notice. Then the first tax bill arrives, along with the first unpaid August, the first month spent finding work instead of doing it, and the realisation that nobody is buying the laptop any more.
The comparison only works if both sides carry the same load. This tool loads the employed side with the value of its benefits and loads the freelance side with tax, overhead and unpaid weeks. What comes out the other end is a like-for-like figure and, more usefully, the revenue you would need to break even against the job.
What employer benefits are actually worth
Add up what your employer pays that you would otherwise pay yourself: the pension or retirement contribution, health cover for you and any dependants, paid holiday and sick days translated into money, the laptop and phone, training budget, sometimes a commuting or housing allowance. For a typical employee this lands somewhere between 20 and 35 percent on top of salary, and in markets where health cover is employer-provided it can be higher still.
Paid leave alone is worth roughly a tenth of a salary. Twenty-five days off plus public holidays is about six weeks of pay for which no work is delivered — six weeks a freelancer funds out of their own rate. That is why the revenue needed to match the job line is usually a much bigger number than people expect.
The hours line is the one that changes minds
The per-hour comparison counts every hour freelancing demands, not just the billable ones. Once proposals, invoicing, chasing payment, bookkeeping and marketing are included, a freelance week is frequently longer than an employed one. Plenty of people discover they are earning more per year and less per hour — which is a perfectly reasonable trade, as long as it is a choice rather than a surprise.
Things this cannot put a price on
- Risk. The revenue figure you typed is an assumption. Run it again 20 or 30 percent lower and see whether the answer survives, because a bad year is a normal event rather than a disaster.
- Control. Choosing your clients, your hours and your subject matter has real value that does not appear in any of these rows.
- Upside. A salary rises a few percent a year. A freelance business can double its rate, add a retainer, or build something that earns without you.
- Isolation and admin. Both are genuine costs, and both are the reason some people return to employment with no regret at all.
A practical middle path: keep the job and run the freelance side in parallel until the side income, adjusted the way this calculator adjusts it, covers your baseline costs for three consecutive months. That is the point at which the leap stops being a gamble.
Frequently asked questions
- Why does the freelance side need to earn so much more than the salary?
- Because a salary quietly includes paid holiday, employer pension contributions, health cover, sick pay and equipment. Freelancing pays for all of those out of the same revenue, so matching a salary's headline figure usually leaves you worse off.
- What should I put for the value of employer benefits?
- Add up the employer's pension or retirement contribution, the cost of replacing health cover yourself, paid holiday and sick days expressed in money, plus any equipment, training or phone allowance. For many employees this is 20 to 35 percent of salary.
- Does this account for job security?
- Not in money, because it cannot be. The comparison assumes the freelance revenue you enter actually arrives. Run it a second time with a pessimistic revenue figure to see the downside honestly.
- Is freelancing worth it if the numbers come out even?
- That is a judgement about control, not arithmetic. Even money usually favours the salary on stability and the freelance side on autonomy and upside — the point of this tool is to make sure you are trading knowingly.
- Which side should the tax percentage reflect?
- The freelance side only. Salary figures here are net of employee tax, so enter your take-home pay for the salary and let the tool apply your set-aside rate to freelance revenue.