Employee Salary Calculator

The key insight is that your contractor gross income is not comparable to an employee salary. You need to subtract self-employment tax (15.3%) and business expenses first, then compare the result to a salary. But even then, the salary is worth more because the employer adds benefits on top — health insurance, retirement matching, PTO, and their half of FICA taxes.

Employer-sponsored health plans cost approximately $9,325 per year total for single coverage. Employers pay about 79% ($7,400) and you pay about 21% ($1,925). If you currently pay $5,400 per year on the marketplace, your savings as an employee would be $5,400 minus $1,925 = $3,475 per year. This savings is built into the Benefits Value shown in your results. Note that actual employer plans vary in cost and contribution percentage, so your real savings may be higher or lower than this estimate.

Beyond the pure math, employment offers stability (no gaps between contracts), unemployment insurance eligibility, easier mortgage qualification, and reduced administrative burden (no quarterly taxes, invoicing, or client acquisition). These non-financial factors have real value that the calculator can't fully capture.

Typical benefit values for a $120,000 salary: health insurance (the calculator uses your actual health insurance costs minus the typical $1,925 employee share to show your real savings; the employer contribution of $7,400, the national average, is what they spend, but your savings is what matters to you), 401(k) match at 3-6% ($3,600-$7,200), 15-25 days PTO ($7,000-$11,500), employer FICA ($9,180), plus disability insurance, life insurance, and professional development. Total: $28,000-$48,000 on top of base salary.

Consider a contractor grossing $150,000. After 15.3% SE tax (~$19,400) and $7,500 in expenses, net income is ~$123,100. An employee earning $120,000 salary receives: employer FICA ($9,180), health insurance (employer pays ~$7,400, you pay ~$1,925/year vs. your current marketplace cost), 401(k) match ($4,800), and 20 days PTO ($9,200), for total compensation of ~$155,000. The lower salary actually delivers more total value.