Salary is just one of the costs of an employee. You need to add Benefits (Health Insurance, 401k, Vacation Days, other perks), Additional Payroll taxes (usually

Salary is just one of the costs of an employee. You need to add Benefits (Health Insurance, 401k, Vacation Days, other perks), Additional Payroll taxes (usually about 7.5% SSn+Medicare), Unemployment and disability insurance costs, Workers Compensation and many other indirect costs. True Contractors (not W2) just get paid a fixed daily/hourly rate without any of these additional benefits. Also, you can fire contractors much easier than employees even in At-Will states in the US. There is no unemployment to worry about. Lot of cost savings.