PTO Value
Paid time off (PTO) includes vacation days, sick days, and sometimes personal days. Its value equals your daily salary rate multiplied by the number of PTO days. As a contractor, every day you don't work is a day you don't earn — so PTO has direct financial value when comparing employment offers.
Example
An employee earning $120,000/year with 20 PTO days: daily rate = $120,000 ÷ 260 working days = $462/day. PTO value = 20 × $462 = $9,231 in compensation the contractor equivalent doesn't receive.
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Business Valuation for Digital Businesses
A small digital business is typically worth its Seller's Discretionary Earnings (SDE) multiplied by an industry-specific multiple. In 2026, multiples range from 1.5x for consulting firms to 6.0x for SaaS businesses, depending on business type, growth, recurring revenue, and owner dependency.
Contractor vs Employee Compensation
Contractors typically need to charge 40-70% more per hour than the equivalent employee hourly rate to achieve comparable take-home pay, because they cover self-employment tax (15.3%), health insurance, retirement, PTO, and business expenses themselves.
Employee Salary Equivalent
An employee salary that matches your contractor income is typically 25-40% lower than your contractor gross, because the employer covers half of FICA taxes, provides benefits, and gives paid time off that you currently fund yourself.