← All Calculators
Employee vs Contractor Calculator
Compare the true cost of hiring a full-time employee versus an independent contractor. Factor in benefits, taxes, overhead, and hidden costs for a clear side-by-side comparison.
W2Full-Time Employee
1099Independent Contractor
Cost Comparison
LOWER COST
W2 Employee
Total Annual Cost$104,487.50
Effective Hourly Rate$50.23/hr
Hidden Costs
Benefits (health, 401k, PTO)$18,750.00
Employer taxes (FICA, FUTA, SUTA)$5,737.50
Overhead (equipment, space, training)$5,000.00
1099 Contractor
Total Annual Cost$156,000.00
Effective Hourly Rate$75.00/hr
Hidden Costs
No benefits to provide--
No employer tax obligation--
Potential misclassification risk--
The employee is $51,512.50/year cheaper
That's $4,292.71/month in savings. Remember to also consider factors like loyalty, IP ownership, and management overhead.