Freelance vs Salary Calculator
Compare true take-home pay as a freelancer vs employee. Accounts for self-employment tax, missing benefits, pension gap, and business expenses.
Employment wins after benefits
As Employee
$112,645
Net annual advantage
As Freelancer
$95,420
Net annual advantage
AI Insights
AI- 1Employee by $17,225 per year after accounting for all costs and benefits.
- 2Employee benefits (pension, health, paid leave) are worth $26,245/year — often overlooked when comparing headline salaries.
- 3Your effective day rate as an employee is $460 — the break-even point for freelance rates.
- 4At 200 billed days/year you have 45 unbilled days for admin, training, holidays, and gaps between contracts.
Take-Home Breakdown
As Employee
$120,000
$30,000$480,000
5.0%
0.0%20.0%
$8,000
$0$32,000
25 days
0 days50 days
As Freelancer
$650
$163$2,600
200 days
100 days245 days
$0
$0$120,000
5.0%
0.0%25.0%
$0
$0$32,000
Not financial advice. Estimates only. Consult a qualified adviser.
What freelancers forget to account for
- Unbilled days — 245 working days minus holidays, admin, training, and gaps between contracts. Most freelancers bill 180–210 days.
- Pension gap — no employer contributions. At 5% of a £65k salary that's £3,250/year you must fund yourself.
- Benefits value — health insurance, life cover, and income protection can easily add £3,000–£8,000/year in equivalent value.