Free tool by USR INFOTECH · Powered by USR AppsContractor vs employee cost
Enter what an employee costs and what a contractor charges. See the yearly cost of each, the difference and the break-even in months.
- Staffing a new role
- Reviewing contract spend
- Finance and board questions
Settings
Employee
Contractor
Comparison
General information, not legal or tax advice. Rules change and differ by state; check with your CA or labour consultant before you act. Everything you type stays in your browser.
Made for people like you
How to use it
- Enter employee cost and contractor fee.
- Set GST and months.
- Read the comparison.
Good to know
Employee cost
Yearly CTC for the months needed, plus one-time hiring cost and overhead.
Contractor cost
Monthly fee × months. GST is counted as a cost only if you cannot claim it back.
Not only cost
Control, notice, benefits, knowledge and legal risk differ. A person who works like an employee under your control may be treated as one, whatever the contract says.
Check before deciding
Ask your CA about GST and TDS on contractor payments, and a lawyer about classification for long-term roles.
Questions people ask
Is it free? Do I need to sign up?
Yes, it is free and you do not need to sign up. Open it and use it as often as you like.
Is my data safe?
The numbers are worked out in your browser. Nothing you type is sent to USR unless you choose to email yourself the result.
How accurate is the result?
It is an estimate based on the rules shown on this page as of November 2026, not legal or tax advice. Rules and rates change, so check with your CA before you act.
Is a contractor always cheaper?
Not always. Over a long period an employee often costs less, once the contractor's margin and GST are counted.
Is my data saved?
No. Everything stays in your browser.
Both kinds of workers in one system
USR HRMS and USR Payroll handle employees and contractors in one place, with the right payments and records for each.
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