Freelance vs Full-Time Benefits Gap Calculator
Value of employee benefits missing from freelance life.
Calculate the annual value of employee benefits that freelancers must self-fund: pension match, healthcare, holiday pay.
What this tool does
Enter full-time salary and typical benefit amounts. The tool totals the annual value of benefits a freelancer must self-fund.
Enter Values
Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Freelance hourly rates must cover benefits employees get included. Pension match 5% of 60k = 3,000. Health insurance 1,500. 25 days holiday at 230/day = 5,750. Sick pay buffer 1,000. Total 11,250/year — 18.75% of salary. A freelancer charging the same hourly rate as their previous salary is taking a real pay cut equal to these missing benefits.
Self-employment comparator.
Quick example
With annual salary of 60,000 and pension match of 5% (plus annual healthcare value of 1,500 and holiday days of 25), the result is 11,269.23. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.
Which inputs matter most
You enter Annual Salary (reference), Pension Match %, Annual Healthcare Value, Holiday Days, and Other Benefits Value. Two inputs usually tip the answer one way or the other. Identify which ones matter most by flipping each value past a round threshold and watching whether the winning option changes.
What's happening under the hood
Pension match = salary × match %. Holiday value = salary / 260 working days × holiday days. Sum all to get gap. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.
Re-running after each rate change
Freelance rates aren't set once. After any rate change, re-run this — the monthly and annual totals drift faster than people expect, and your runway number changes with them.
What this doesn't capture
Freelance income is lumpy. The calculation assumes steady work; reality includes dry spells, delayed invoices, and client churn. Plan against a pessimistic version of the result, not the central case.
Benefits gap produces an annual value based on the inputs provided.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
Pension match = salary × match %. Holiday value = salary / 260 working days × holiday days. Sum all to get gap.
Frequently Asked Questions
Why include holiday value?
Are these taxable?
What's a reasonable freelance premium?
Does this mean freelancing is worse?
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