Hourly Freelance vs W-2 Salary
A **$75/hr freelance** rate is not equal to **$150k W-2**—freelancers pay both halves of FICA, fund their own benefits, and lose billable hours to sales and admin. Many use a 1.3-1.5× multiplier rule on W-2 salary.
Step by step
1. Billable hours
Only 1,000-1,400 of 2,080 hours may be billable yearly.
2. Add benefits gap
Health, match, PTO, and unemployment insurance have dollar value.
3. Set aside taxes
Quarterly estimated taxes on 1099 income.
Freelance vs W-2
Higher hourly sticker price compensates risk and overhead.
- Freelance hourly: Flexibility; variable income; self-employment tax.
- W-2 salary: Steady pay; benefits; limited upside per hour.
Use our calculators
Common mistakes
- Ignoring unpaid vacation
- Skipping disability insurance
FAQ
What multiplier is fair?
Often 1.25-1.4× equivalent W-2 hourly after benefits—adjust for your market.