Review Department of Labor guidance on employee benefit requirements
The U.S. Department of Labor overview of employee health plans, retirement benefits, and other employer-provided benefits that factor into total compensation comparisons.
Source: U.S. Department of LaborarticleApplies 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