---
title: "Contractor vs Employee in United States — Geo-Parity"
description: "At $100/hr in United States, contracting nets more than employment. Break-even around $92/hr. Compare net take-home, effective tax and the rate you need to charge."
canonical: "https://geo-parity.com/contractor-calculator/united-states/"
json: "https://geo-parity.com/api/contract.json?country=US&contractorRate=100&employeeRate=70&hours=40"
generator: geo-parity markdown twin
---
Contracting · United States

# Contractor or employee in 🇺🇸 United States?

At **$100/hour**, contracting nets more than employment — the break-even rate is about **$92/hour**.

## Side by side at $100/hour

|  | Contractor | Employee |
| --- | --- | --- |
| Gross | $192,000 | $145,600 |
| Tax | $61,440 | $34,944 |
| Health insurance | $9,000 | — |
| Net | $121,560 | $110,656 |
| Effective rate | 37% | 24% |

Self-employment tax 15.3% + federal/state income tax; employer-sponsored health for W2. Run your own rate in the [interactive calculator](https://geo-parity.com/contractor-calculator/?country=US).

## To take home $100,000 a year

You need to charge about **$111/hour** (day rate **$891**), billing **1440** hours across the year for **$160,294** of gross revenue.

Change the target in the [required-rate calculator](https://geo-parity.com/contractor-calculator/?tab=rate&country=US).

## Checked against the OECD

This page uses an employee rate of **24%**. The OECD's Taxing Wages series independently puts income tax plus employee social contributions at **24.3%** of gross pay for a single person on the average wage in 2025 — and the full tax wedge, which adds what the employer pays on top, at **30.0%** of total labour cost.

The rate above is checked on every build against the range OECD measures across earnings from two-thirds of the average wage to two-thirds again above it, and a figure outside that range fails the build. The two are not expected to match exactly: this site carries one blended rate where a real system has brackets.

## Countries with a similar contracting premium

- [🇫🇷 France](https://geo-parity.com/contractor-calculator/france/) — +29% for contracting
- [🇪🇸 Spain](https://geo-parity.com/contractor-calculator/spain/) — +28% for contracting
- [🇨🇳 China](https://geo-parity.com/contractor-calculator/china/) — +24% for contracting
- [🇬🇷 Greece](https://geo-parity.com/contractor-calculator/greece/) — +21% for contracting

## Questions

- **Is it better to contract or be employed in United States?**: At $100/hour against a salaried equivalent of $70/hour, 40 hours a week, contracting nets more than employment in United States: a contractor keeps about $121,560 against an employee's $110,656, a difference of $10,904. The break-even rate — where the two are equal — is about $92/hour. Self-employment tax 15.3% + federal/state income tax; employer-sponsored health for W2.
- **What hourly rate do I need to charge in United States?**: To take home $100,000 a year after tax, health cover and unpaid time, you need roughly $111/hour, or a day rate around $891. That assumes $160,294 of gross revenue across 1440 billable hours.
- **Why is the contractor tax rate in United States different from the employee rate?**: A contractor usually pays both halves of social contributions where an employer would otherwise pay one, and often buys health cover privately. Here that works out at about 37% effective for a contractor against 24% for an employee. Self-employment tax 15.3% + federal/state income tax; employer-sponsored health for W2.
- **How accurate are these United States figures?**: The employee rate used here is 24%. The OECD's Taxing Wages series independently reports 24.3% of gross pay going to income tax plus employee social contributions for a single person on the average wage in 2025, and 21.4%–29.2% across earnings from two-thirds to two-thirds again above that. The rate here is checked against that range on every build and a figure outside it fails. It is still one blended rate where a real system has brackets, so treat it as an estimate: your actual liability depends on your regime, deductions and region.

Estimates for comparison, not tax advice. Effective rates are blended, not bracket-by-bracket except where noted, and every country has regimes and deductions a single rate cannot express.

---

Source: Geo-Parity — https://geo-parity.com/contractor-calculator/united-states/ · JSON: https://geo-parity.com/api/contract.json?country=US&contractorRate=100&employeeRate=70&hours=40