Contractor Salary Calculator: What Your Business Can Actually Pay You
Your contractor salary is what is left after the business pays its bills: jobs per week, times your average job price, times the weeks you work, minus twelve months of expenses. This calculator turns those four numbers into annual net income, monthly and weekly take-home, an effective hourly figure and a margin. The result is before income tax and self-employment tax; the section after the example shows what still comes out of it.
It answers a different question from the hourly rate calculator, which works backward from the income you want to the rate you must charge, and from the profit calculator, which prices one job.
Your Business Numbers
Average number of paying jobs you complete each week
What you charge on a typical job (revenue, not profit)
Insurance, vehicle, fuel, tools, marketing, software, taxes
Subtract vacation, holidays, and seasonal downtime
Your Estimated Income
How the calculator gets the number
Seven lines of arithmetic, nothing hidden.
- 1.
Weekly revenue
jobs per week × average job price
- 2.
Annual revenue
weekly revenue × weeks worked
- 3.
Annual expenses
monthly expenses × 12
- 4.
Net income (the headline number)
annual revenue − annual expenses
- 5.
Monthly and weekly take-home
net income ÷ 12, and net income ÷ weeks worked
- 6.
Effective hourly
net income ÷ (weeks worked × 40 hours)
- 7.
Margin
net income ÷ annual revenue
Two things to know about the inputs. Average job price is revenue, so if it includes materials you bill for, those materials belong in expenses (or quote a labor-only average). And the income label in the results (Below Average through Top Earner) is a fixed cut at $30,000, $60,000 and $100,000 of net income, not a survey; the sourced comparison is further down.
Worked example: a solo handyman
Illustrative inputs, not a customer's figures and not recommended values: 6 jobs a week at an average of $350, $2,400 a month in expenses (truck, fuel, insurance, tools, phone, software, advertising), 48 working weeks.
- Weekly revenue
- 6 jobs × $350 = $2,100
- Annual revenue
- $2,100 × 48 weeks = $100,800
- Annual expenses
- $2,400 × 12 = $28,800
- Net income
- $100,800 − $28,800 = $72,000
- Monthly / weekly take-home
- $6,000 / $1,500
- Effective hourly (1,920 hours)
- $37.50
- Margin
- 71.4%
What still comes out of the $72,000
- Self-employment tax base
- 92.35% × $72,000 = $66,492
- Self-employment tax (15.3%)
- $10,173
- Left before income tax
- $61,827
- Federal and state income tax
- depends on your filing status and state; not estimated here
- Health insurance, retirement
- whatever you choose to buy; an employee's package included them
Self-employment tax is 15.3% (12.4% Social Security plus 2.9% Medicare) on 92.35% of net earnings, and the employer-equivalent half is deductible when you figure adjusted gross income: IRS Topic 554 (page reviewed September 24, 2026; checked October 7, 2026). The Social Security part stops at an annual wage base that changes each year. This is the published rule, not tax advice for your return.
Which input to change first
The same $72,000 example with one input moved at a time. Arithmetic on the illustrative inputs above, nothing more.
| Change | New net income | Difference |
|---|---|---|
| Raise the average job from $350 to $385 (10%) | $82,080 | +$10,080 |
| Book one more job a week (7 instead of 6) | $88,800 | +$16,800 |
| Cut expenses 10% (to $2,160 a month) | $74,880 | +$2,880 |
| Work 50 weeks instead of 48 | $76,200 | +$4,200 |
Price and volume move the number far more than trimming expenses, which is why pricing is usually the first fix: a 10% price increase adds three and a half times what a 10% expense cut does. One more job a week only works if the hours exist; when billable hours are the constraint, the hourly rate calculator shows how much the rate has to carry, and the break-even calculator keeps the extra job from being one you lose money on.
How the result compares with a paycheck
There is no reliable national figure for what self-employed contractors earn, so this page does not quote one. What exists is BLS wage data for employees doing similar work. All figures are national medians or means for the whole occupation, not local rates and not contractor earnings.
| Employees doing similar work | Wage | Source |
|---|---|---|
| General maintenance and repair workers (handyman work as an employee) | $49,590 a year, $23.84 an hour | BLS Occupational Outlook Handbook, May 2025 median |
| Construction laborers and helpers | $46,680 a year, $22.44 an hour | BLS Occupational Outlook Handbook, May 2025 median |
| All construction and extraction occupations | $65,360 a year (mean, not median) | BLS Occupational Employment and Wage Statistics, May 2025 |
An employee's wage is not the whole package. Across private industry, employers paid $14.07 an hour in benefits on top of $32.82 in wages in June 2026, so benefits were 30.0% of total compensation, about 43 cents per wage dollar (BLS Employer Costs for Employee Compensation, June 2026, released September 9, 2026). Applying that ratio to the $49,590 maintenance-worker median gives roughly $70,900 of total compensation; that is illustrative arithmetic across two different BLS series, not a published figure. Add that the self-employed pay both halves of Social Security and Medicare, and a net income that merely matches an employee's wage is a pay cut.
BLS pages checked October 7, 2026; the Outlook Handbook pages carry May 2025 wages and were last modified August 27, 2026.
Questions about contractor pay
Is the result my salary or the business's profit?
For a sole proprietor they are the same pool of money: net income is what is left after the business pays its expenses, and it is yours to pay yourself from, reinvest or hold. The calculator does not split owner pay from money kept in the business. If you want to keep, say, $10,000 in the business for a truck, subtract it from the result and treat the remainder as pay.
Do materials go in the average job price or in expenses?
One or the other, never both. If your average job price includes materials you bill the customer for, put the cost of those materials in monthly expenses. If you enter a labor-only average, leave materials out of expenses. Mixing the two overstates income by the material cost on every job.
How much of the result should I set aside for taxes?
Two layers. Self-employment tax is 15.3% (12.4% Social Security plus 2.9% Medicare) on 92.35% of net earnings, and you deduct the employer-equivalent half when figuring adjusted gross income; on the $72,000 example that is $10,173. Federal and state income tax come on top at your own bracket. If you expect to owe $1,000 or more, the IRS expects quarterly estimated payments, and you avoid the underpayment penalty by paying at least 90% of this year's tax or 100% of last year's, whichever is smaller. These are the IRS rules as published, not advice for your return.
Why is the effective hourly rate based on 40 hours a week?
It is a fixed assumption in the calculator: net income divided by weeks worked times 40. It is there to make the result comparable with an hourly wage. If you actually work 50-hour weeks, divide net income by weeks worked times 50 yourself; the $72,000 example drops from $37.50 to $30.00 an hour.
What do the Below Average, Average, Above Average and Top Earner labels mean?
They are fixed cutoffs at $30,000, $60,000 and $100,000 of net income, there to make the result easier to read at a glance. They are not survey results and not a benchmark for your trade or area. The sourced comparison on this page is the BLS wage table above the questions.
How much do independent contractors make a year?
There is no reliable national figure for self-employed contractor income on this page, and we do not invent one. What exists is BLS wage data for employees doing similar work: general maintenance and repair workers had a median of $49,590 and construction laborers and helpers $46,680 in May 2025. Your own number is the calculator result, and the comparison section explains why it has to be higher than an employee wage to be equivalent.
Run it again with last quarter's real numbers
Guesses in, guesses out. Pocket Boss keeps the paid invoices behind your revenue on every plan, and on Essentials and above the Reports page totals revenue collected, expenses and profit for any date range, so the four inputs come from records instead of memory. From $19.99/month, 14-day trial.
Related: contractor hourly rate calculator, contractor break-even calculator, contractor markup calculator, all contractor calculators.