Contractor Hourly Rate Calculator
A contractor rate needs to replace salary, benefits, employer-paid taxes, paid leave, equipment, software, and the risk of inconsistent work. This is why a contractor hourly rate is usually much higher than a salaried employee's implied hourly wage.
Contractor rate = desired annual take-home plus benefits replacement, taxes, fees, and overhead divided by annual billable hours.
What contractors often forget
Benefits are the hidden part of employee compensation. Health insurance, retirement contributions, paid vacation, equipment, training, payroll taxes, and HR support may disappear when you become independent. Your rate has to carry those costs.
When to use this page
Use it when a company asks for a 1099, sole trader, self-employed, umbrella, or business-to-business rate instead of a normal salary.