Comparison Matrix

Role Economics — Hire vs Contract

Same target take-home, two delivery paths. Left column is the salaried offer — benefits absorbed, high utilization (you're "always working"). Right column is the contract path — self-funded benefits, business overhead, lower billable utilization. The delta bar below shows which path nets more on an apples-to-apples basis.

The honest answer most contractors discover: matching a $120K salaried role at 60% utilization requires roughly $130–$150 per hour, not the $60 hourly equivalent the math-of-2080-hours suggests.

Comparison Matrix · Dual Scenario
Lock Variables · 0/4 synced
Locked fields share one value across both scenarios — change in either column, change in both.
Scenario A · Hire (W-2)
MINIMUM_VIABLE_RATE
Freelancer reality check — rate that matches a corporate salary after invisible costs
Target Annual Salary$
Benefits Value / Year$
Business Overhead / Year$
Billable Weeks / Year
Hours / Week
Utilization %
Living Wage / Year$
MINIMUM VIABLE RATE
$130/hr
Based on 1128 effective billable hours/year (60% utilization).
WAGE COMPARISON
Living Rate$61/hr
Target Rate$130/hr
Annual Need
$147,000
Eff. Billable Hours
1128/yr
Living Rate
$61/hr
Overhead Share
18%
▸ METHODOLOGY
MVR = (salary + benefits + overhead) ÷ (weeks × hours × utilization). Utilization captures non-billable time (admin, sales, sick days) — at 60%, 40 weekly hours becomes 24 billable. Benefits value should reflect health insurance, 401k, paid time off. Overhead covers tools, accounting, equipment.
Scenario B · Contract (1099)
MINIMUM_VIABLE_RATE
Freelancer reality check — rate that matches a corporate salary after invisible costs
Target Annual Salary$
Benefits Value / Year$
Business Overhead / Year$
Billable Weeks / Year
Hours / Week
Utilization %
Living Wage / Year$
MINIMUM VIABLE RATE
$130/hr
Based on 1128 effective billable hours/year (60% utilization).
WAGE COMPARISON
Living Rate$61/hr
Target Rate$130/hr
Annual Need
$147,000
Eff. Billable Hours
1128/yr
Living Rate
$61/hr
Overhead Share
18%
▸ METHODOLOGY
MVR = (salary + benefits + overhead) ÷ (weeks × hours × utilization). Utilization captures non-billable time (admin, sales, sick days) — at 60%, 40 weekly hours becomes 24 billable. Benefits value should reflect health insurance, 401k, paid time off. Overhead covers tools, accounting, equipment.
Delta Bar · Contract rate − Hire equivalent rate
+$0/hr
A: $0/hr · B: $0/hr
Winner: Parity

What the comparison reveals

The contract column will almost always show a higher hourly number — because contract has to cover self-employment tax, health insurance, retirement, paid time off, sales time, admin, and slow weeks. Don't read that gap as "contracting pays more." Read it as "this is what the contract rate has to be to match the salaried offer."

Useful exercise: take a contract rate you've been quoting and plug it into the right column with realistic utilization. If the resulting take-home doesn't match what a similar W-2 role pays, you're underpriced.