Contractor to employee calculator
Converting a contractor to a full-time employee changes the cost structure completely. Employer taxes, social contributions, and benefits mean the same budget buys a different gross salary. See exactly how the numbers shift.
Assumes 230 working days/year (8h/day, ~20 days PTO + holidays)
Select a country to get started
See what it costs to convert a contractor to a full-time employee
Estimates based on OECD aggregate data for employer and employee contribution rates. Actual costs vary by salary level, industry, and specific regulations. This tool provides indicative figures only and should not be used as tax or legal advice.
Why convert a contractor to an employee?
The most common reason is compliance. If a contractor works exclusively for your company, follows your schedule, and uses your tools, many countries will classify them as an employee regardless of what the contract says. The penalties for misclassification can include back taxes, social contributions, fines, and in some jurisdictions, criminal liability.
Beyond compliance, converting to employment gives the worker access to benefits like health insurance, pension contributions, paid leave, and employment protections. It also gives you more control over IP ownership, non-compete obligations, and long-term retention.
How does the conversion work?
A contractor's rate covers everything: their income, their own taxes, health insurance, retirement savings, equipment, and paid time off. When you convert them to an employee, the employer picks up many of those costs directly through mandatory social contributions.
This calculator takes your current contractor budget and works backwards: given the employer contributions required in the selected country, what gross salary can you offer while staying within the same total budget? The employee will see a lower gross number, but they gain benefits, protections, and employer-funded contributions that contractors pay for themselves.
What if I want to match their take-home pay?
If you want the employee to take home the same amount as they did as a contractor, you'll need a larger budget. Use the take-home pay calculator to find the gross salary that produces the desired net pay, then use the employer cost calculator to see your total cost at that salary level.
Will it cost more to employ someone than to contract them?
At the same total budget, no. This calculator keeps your total spend the same and shows you what salary that budget can support after employer contributions. If you want to increase the budget to match the contractor's previous take-home, then yes, it will cost more.
Do I need an EOR to convert a contractor?
If you don't have a legal entity in the contractor's country, yes. You need a local employer to put them on payroll, withhold taxes, and pay social contributions. An Employer of Record does exactly this without requiring you to set up a subsidiary.
What about the contractor's existing benefits?
Contractors typically fund their own benefits (health insurance, retirement, insurance). As an employee, many of these are covered by mandatory employer contributions or become part of the benefits package. The trade-off is a lower gross number but more comprehensive coverage.
Ready to convert a contractor?
We connect you with EOR providers who handle the transition, from contracts to payroll to compliance.
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