# FTE vs. Contractor

> Most teams already have an opinion on this trade-off. Few have done the math. This model converts a salary into what your company actually pays, making the FTE and Contractor costs genuinely comparable. The output isn't just a cost comparison. It's the starting point for a broader conversation about where full-time commitment is worth the premium. Run it twice: once with the low-end of your compensation bands, once with the high-end. The range between those two outputs is your uncertainty — and your negotiating room.

Published model on Paths: https://getpaths.io/p/fte-vs-contractor
Values below are the base case of the published snapshot.

## Drivers

- FTE Annual Salary: $100,000.00
- Benefits & Taxes: 25%
- Bonus: $10,000.00
- Agency Fees: 5%
- Contractor Hourly Rate: $50.00
- Avg. Weekly Hours: 40
- Equipment & Software: $2,000.00

## Formulas

- Fully Loaded Salary = FTE Annual Salary * (1 + Benefits & Taxes ) -> $125,000.00
- Contractor Total Comp = Contractor Annual Salary * (1 + Agency Fees ) -> $109,200.00
- Cost Delta = FTE Annual Cost - Contractor Total Comp  -> $27,800.00
- Contractor Annual Salary = Contractor Hourly Rate * Avg. Weekly Hours  * 52 -> $104,000.00
- FTE Annual Cost = Fully Loaded Salary + Equipment & Software + Bonus  -> $137,000.00