Hourly to salary calculator
The honest conversion runs through the employer's wallet, not yours: your contract revenue has to cover the salary plus the employer's FICA half, health premiums and 401(k) match. Enter your rate and billable time and this shows the W-2 salary that costs an employer exactly what your contract does.
As a W-2 offer
Matching W-2 salary$103,717
- Contract revenue / year
- $122,400
- Employer costs around that salary
- $18,683
- Your rate's premium over the salary
- 18%
- Billable hours / year
- 1,440
Estimate
workingfigures.com/calculators/hourly-to-salary-calculator
Formula
Contract revenue = hourly rate × billable hours × weeks billed. Matching salary = (contract revenue − 12 × monthly health premium) ÷ (1 + 0.0765 + match%). The 0.0765 is the employer half of FICA (6.2% Social Security + 1.45% Medicare); the match term is the employer 401(k) contribution as a share of salary.
Assumptions
Employer FICA is applied flat at 7.65% with no Social Security wage-base cap, the same simplification our W-2 vs 1099 calculator makes, so converting in either direction gives consistent answers. Paid time off is priced through the weeks you bill, not as a separate line. State-side employer costs (unemployment insurance, workers' comp) vary too much to bake in; treat the result as the floor of what an employer really pays.
FAQ
- Why is the matching salary so much lower than my contract revenue?
- Because an employer spends real money around a salary. At the defaults ($85 per hour, 30 billable hours, 48 weeks) contract revenue is $122,400, but the matching salary is about $103,717: the other $18,700 or so is the employer FICA half, a $550 monthly health premium and a 4% match that your rate now has to fund.
- Does matching mean the two offers feel the same in my pocket?
- No, it means they cost the payer the same. On the contract side you still pay both halves of FICA yourself, buy your own coverage and carry the risk of empty weeks. That risk is why experienced freelancers usually price 20 to 40% above the salary they would accept, not at the break-even point this tool computes.
- What counts as a billable hour here?
- Only time you can put on an invoice. Admin, proposals, bookkeeping and finding the next client are unpaid on 1099, which is exactly why a 40-hour work week rarely yields more than 30 billable hours. If you enter 40 billable hours at 52 weeks you are comparing against a job with zero vacation and zero overhead, and the salary will look worse than it should.