Drag any number to adjust, click it to type.
Gross Salary
the job offer, before tax
Benefits Value
monthly worth of employer-paid extras
Payslip Tax
gross to net, as an employee
Billable Hours
per week as a freelancer (shared)
Weeks Off
per year, unpaid when freelance (shared)
To replace a $3,500/month salary plus $300 in benefits, charge about $40/h. To beat the job, aim above $46/h.
What this salary is worth per hour
Using standard assumptions for freelance tax (25%) and business costs. Set your real numbers →
Two pay slips, same month
The employee
The freelancer, at the matching $40/h
Same package, half the hours
Your billable year is about 56% of the employee's paid year. That is why $20/h on a payslip needs $40/h on an invoice.
Reality check
This tile can compare the offer against your real freelance numbers (your target rate, your costs, your capacity) once it knows them. Set them up in the rate calculator →
Why you can't divide a salary by 2,080 hours
The most common conversion is also the most wrong one. Take the annual salary, divide by 2,080 working hours, call it your rate. A $42,000 salary becomes $20 an hour, and a freelancer who quotes it loses money every month without understanding why.
The division fails twice. First, an employee is paid for all 2,080 hours: vacation, slow days, meetings, everything. A freelancer only earns during billable hours, which for most people is around half of that. Second, the salary is only part of the pay. Benefits, employer contributions and equipment arrive on top of it, silently. The freelance rate has to buy all of it back.
What a salary package really contains
Three layers. The take-home pay, which everyone sees. The benefits, which the employer pays and the employee rarely counts: pension contributions, insurance, meal vouchers, sometimes a car or a phone. And the guarantees, which have no line on any payslip: paid vacation, sick days, a notice period, and the certainty that next month's hours are already sold.
This calculator prices the first two layers directly, and prices the third one as the security premium.
The security premium
Matching a salary is not enough, because the two incomes are not equally reliable. The salary arrives every month whether the pipeline is full or not. The freelance income does not. The calculator adds a fixed 15% on top of the matching rate for this: the price of carrying your own risk. It is a published assumption, not a law. If your pipeline is very stable, you can mentally lower it; if you are starting out, treat it as a minimum.
Reading the comparison both ways
The tool converts in both directions at once. Forward: type a job offer and see the freelance rate that replaces it. Backward (once the rate calculator knows your numbers): see your current freelance plan expressed as a gross salary. The backward reading is often the useful one. It turns "should I take this job?" into a comparison between two numbers in the same unit.
How this calculator works
The conversion compares packages, never raw numbers:
- Package = salary take-home (gross × (1 − payslip tax)) + the monthly value of employer-paid benefits.
- Required monthly invoice = package ÷ (1 − freelance tax) + business costs (tax-deductible, so at face value).
- Matching rate = invoice ÷ monthly billable hours, where billable hours count your real availability: hours per week × (52 − weeks off) ÷ 12.
- The security premium adds a fixed +15% on top of the matching rate: what freelancing should pay for carrying its own risk.
- The naive rate (annual salary ÷ 2,080 hours) is shown for contrast: it is the mistake this tool exists to prevent.
- Freelance tax and business costs come from the rate calculator when you've used it; standard assumptions otherwise, clearly labeled.
Last updated: July 2026
How do I convert a salary to a freelance hourly rate?
Start from the full package, not the salary. Package = salary take-home + the monthly value of employer-paid benefits. Then add room for freelance tax (divide by 1 minus your tax rate), add your business costs, and divide by your real monthly billable hours. With this calculator's defaults, a $3,500/month salary converts to about $40/h, roughly double the naive salary-divided-by-hours figure.
Why is the freelance equivalent of a salary so high?
Two reasons. A freelancer's billable year is roughly half of an employee's paid year (about 1,100 hours against 2,080), so the same money must be carried by fewer hours. And the rate must also buy back everything the employer paid invisibly: benefits, contributions, equipment, and covered downtime.
How much more should a freelancer earn than an employee?
After matching the full package, a common rule is to add a security premium of about 15%, because freelance income carries risks a salary does not: empty months, late payments, no notice period. This calculator shows both numbers separately, so you can see the match and the premium on their own.
How much are employee benefits worth per month?
It varies a lot by country and employer, but pension contributions, health insurance, meal vouchers and equipment together are commonly worth somewhere between 10 and 25% of the gross salary. Check your own payslip and contract rather than guessing: the benefits input in this calculator takes a monthly amount, so you can be exact.
Is freelancing worth it financially?
It can be, if the rate is set honestly. Freelancing pays for efficiency and experience in a way salaries rarely do, and every rate increase is yours to keep. But a freelance income that only matches your old salary, without the premium, is the same money with more risk. Run the comparison with your own numbers rather than a rule of thumb.
What does an employee really cost an employer?
Typically 1.25 to 1.4 times the gross salary, once payroll charges, insurance, equipment and overhead are counted. This matters in negotiations: when a client compares your invoice to a salary, the fair comparison is the employer's full cost, not the number on the payslip.
Should I enter my salary as monthly or yearly?
Whichever you know. The small selector under the salary input switches the display between monthly and yearly; the calculation is identical either way.
Does this calculator handle my country's exact taxes?
No, and on purpose. You set two flat percentages: the payslip tax you can read from a real payslip, and your freelance tax rate (shared with the rate calculator). That keeps the comparison honest in any country without pretending to be tax advice. For precise numbers, ask an accountant.
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