Compare Salary and Hourly Wages Instantly
Whether you are transitioning from a full-time W-2 job to freelancing, or you are an employer trying to set a competitive hourly wage, understanding the true math behind compensation is critical. The ToolBizz Free Salary Converter instantly breaks down any figure into yearly, monthly, weekly, daily, and hourly rates.
Employee vs Contractor Compensation
A massive mistake new freelancers make is calculating their target hourly rate based exactly on their old corporate salary. If you made $80,000 a year (about $38.46/hr), charging $40/hr as a freelancer will actually result in a massive pay cut.
- Self-Employment Tax: Freelancers in the U.S. pay both the employer and employee portions of FICA (15.3%), immediately eating into your hourly rate.
- Unbillable Hours: You cannot bill 40 hours a week as a freelancer. At least 15-20 hours are spent on marketing, bookkeeping (using our Expense Tracker), and sales.
Set Your Target Rate
If you are an employer determining how much a new hire will actually cost your business, the base salary is just the beginning. Use the True Employee Cost Calculator to find the "fully loaded" cost of your team members before finalizing your hiring budget. Then, use the Pricing Calculator to ensure your sales prices cover those new labor costs.
Frequently Asked Questions (FAQ)
Assuming a standard 40-hour workweek for 52 weeks, there are 2,080 working hours in an average year.
This salary converter calculates gross pay (before taxes). Your actual take-home (net) pay will be lower due to federal, state, and local income taxes, as well as deductions for health insurance and retirement contributions.