Salary Equivalence Calculator: Freelance vs Employed

How does the salary equivalence calculator work?

Transitioning from employee to freelancer is a complex financial decision. The most common question is: how much money should I charge my clients to maintain my current standard of living? This calculator of salary equivalence solves that unknown by transforming a monthly net salary into a realistic gross billing figure.

Unlike an employee, a freelancer must cover social security contributions, direct taxes, and infrastructure costs out of their own pocket. Our tool automatically performs this breakdown so that you don't lose purchasing power in your transition to entrepreneurship.

Key factors: From net salary to gross billing

To match an employee's salary, it is necessary to add to the desired net figure a series of concepts that the company usually assumes invisibly for the worker:

• Self-Employed Contribution (RETA): The Social Security contribution, which is now calculated based on real net earnings.
• IRPF (Income Tax): The advance payment or quarterly settlement that taxes your profits.
• VAT (Value Added Tax): Although it is not an expense (it is a tax you collect), it influences the final price your client perceives.
• Operating Expenses: Software, accounting/management services, supplies, office rent, or civil liability insurance.
• Holidays and Sick Leave: A self-employed person must invoice enough in 11 months to cover the 12 months of the year, including possible periods of illness.

Why should a self-employed person invoice more than an employee?

There is an unwritten rule in the financial sector: a self-employed person should invoice, at a minimum, between 30% and 50% more than the gross salary they would receive as an employee. This is due to the absence of extra payments, the lack of severance pay, and the total assumption of the means of production.

Using this calculator allows you to set hourly or project rates that are sustainable in the long term, avoiding the common mistake of undervaluing self-employment by comparing it directly with a traditional payroll.