See Bureau of Labor Statistics data on employer compensation costs
BLS data showing that benefits account for approximately 30% of total employer compensation costs on average, with health insurance and paid leave being the largest components after wages.
Source: Bureau of Labor StatisticsarticleApplies to: 2025
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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.
Last reviewed: 2026-11-01 • Federal / General