Gig Economy Vs Employed Income Calculator
Compare freelance or gig income against a salaried job in real terms, accounting for self-employment tax, business expenses, and the dollar value of employee benefits.
Income Comparison
Enter both income options to compare their real effective value
Total earnings before taxes and expenses.
Mileage, equipment, software, platform fees, insurance, etc.
Average hours per week spent on gig or freelance work.
Gross salary before tax, as stated in a job offer.
Health insurance, retirement match, paid time off, and other perks. Typically $8,000–$20,000.
Standard scheduled hours per week, including any regular unpaid overtime.
Your Income Comparison
Effective hourly value, tax impact, and total real compensation
Enter both income options above and click Compare Income to see which pays more in real terms.
Typical Employee Benefits Value
Approximate annual dollar value of common employee benefits that gig and freelance work usually doesn’t include, useful for filling in the benefits field above.
| Benefit | Typical Annual Value | % of a $55k Salary | Notes |
|---|---|---|---|
| Employer health insurance | $5,000–$9,000 | ~9–16% | Employer’s share of premiums |
| Retirement plan match | $1,500–$3,000 | ~3–5% | Common 3–5% employer 401(k) match |
| Paid time off & holidays | $3,000–$5,000 | ~5–9% | Based on ~15–20 paid days/year |
| Payroll tax (employer share) | ~7.65% of salary | ~7.65% | Paid by employer, not deducted from you |
| Disability & life insurance | $300–$800 | ~1% | Often low-cost group coverage |
Gig Vs Employed Income FAQ
Everything you need to know about comparing gig economy earnings with traditional salaried employment.
To fairly compare gig income to a salaried job, subtract business expenses and the extra self-employment tax from gig earnings, then compare that figure against a salary plus the dollar value of employee benefits such as health insurance, retirement matching, and paid time off.
Traditional employees split payroll tax with their employer, each paying roughly 7.65%. Self-employed and gig workers are considered both employer and employee, so they typically owe the full 15.3% self-employment tax on their net earnings, which is why the same gross income goes further for a salaried employee.
Common benefits worth valuing include employer-paid health insurance premiums, retirement plan matching, paid time off and holidays, and any other perks with a real dollar cost the employer would otherwise pay you in cash.
Not necessarily. High-demand freelance or contract rates can outweigh the extra self-employment tax and lack of benefits, especially for specialized skills. The calculator above compares effective hourly value so you can see which applies to your specific numbers.
Common gig work expenses include vehicle mileage, equipment, software subscriptions, phone and internet costs, insurance, and platform fees. These reduce net gig income and should be subtracted before comparing it to a salary.
Yes. Gig workers generally do not get paid holidays, sick days, or vacation, while salaried employees often do. This calculator accounts for that by comparing effective hourly value across the actual hours each option requires you to work.