Free calculator

Salary to Contract Rate Calculator

Convert a full-time salary into an independent contractor hourly or day rate that accounts for taxes, benefits, and downtime.

Rate modelUSD, annualized

Target take-home

Annual expenses

Tax reserve

Profit buffer

Weeks off

Billable hours/week

Utilization70%

Project hours

Retainer hours

Required hourly rate$239

Day rate$1,910

Project quote$11,533

Monthly retainer$3,954

Billable hours/year902

Floor rate: $152 before tax and profit. Revenue target: $215,286.

Best fit

Best for people leaving employment or negotiating a contract version of a salaried role.

Use the result as your floor, then adjust for urgency, client segment, strategic value, and scope uncertainty.

Replace employer benefits with your own insurance, tools, retirement, and unpaid leave.
Do not divide salary by 2,080 hours unless the client also covers your non-billable time.
Use the minimum rate as a floor, not as your public price.

Common questions

What multiplier should I use to convert salary to contract rate?

A common starting point is 1.8x to 2.7x the salaried hourly equivalent. The exact multiplier depends on taxes, benefits, utilization, and risk.

Should contractors charge more than employees?

Yes. Contractors carry their own benefits, unpaid downtime, sales costs, equipment, taxes, and business risk.