[timo614]

There's also the self employment tax to consider for contractors working for themselves in the US.

Employers pay 7.65% and you pay 7.65%. If you're on your own in addition to the income tax you have to pay you also need to pay the whole 15.3% of it. To compare salaries between a person working for themself and someone working for a company it should be taken into account since it's a big chunk of the money you're making.

[noodle]

I was sort of spitball including that in there in my calculations, but yes. This is an important thing for people to understand when dealing with or becoming a contractor/freelancer.

I think that a lot of people don't realize things like this when they do their back of the napkin calculations for freelancers/contractors. $50/hour != $100k salary.

[j45]

In addition to assumptions of napkin salaries, the numbers could work in a place with very low taxes (10% on profit under a few hundred thousand), or friendlier contractor taxation locales, like Canada where you can do some reasonable income splitting between personal and corporation expenses.