Employee Cost Calculator
Calculate the true total cost of an employee including taxes, benefits and overhead.
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Frequently Asked Questions
How much does an employee really cost beyond salary?
Total employee cost is typically 1.25-1.40x base salary for hourly workers and 1.30-1.50x for salaried employees with full benefits. On a $65,000 salary: employer FICA $4,972, FUTA/SUTA ~$500, health insurance $7,000+, 401k match $2,600, overhead $13,000. Total can easily reach $90,000-$100,000 per year.
What is included in employer payroll taxes?
Employer payroll taxes include: Social Security employer share (6.2% on wages up to $168,600), Medicare employer share (1.45% on all wages), FUTA (0.6% on first $7,000 after state credit), and SUTA (varies by state, typically 1-5% on first $7,000-$50,000). These add approximately 7.5-10% to base wages.
How does hiring a contractor compare to an employee?
Contractors cost no employer taxes, no benefits, no unemployment insurance, and no overhead. However contractors typically charge 20-40% more per hour than an equivalent employee to cover their own taxes and benefits. For short-term or specialized work contractors are cheaper. For ongoing full-time roles, employees are usually more cost-effective after factoring productivity and loyalty.