Employee Cost Calculator
A salary is only part of what an employee costs. Add benefits, payroll taxes, equipment and overhead to see the fully-loaded annual, monthly and hourly cost of a hire.
How to use the employee cost calculator
- Enter the base salary you plan to offer.
- Set benefits load — health insurance and retirement contributions commonly run 20–30% of salary.
- Set employer payroll taxes: roughly 7.65% FICA match plus unemployment insurance, so 8–12% is typical.
- Add one-time equipment and recurring overhead (software seats, workspace, training).
Formula
About this calculator
The rule of thumb that an employee costs 1.25–1.4× their salary is broadly right, and this calculator shows exactly where the multiplier comes from. Employer payroll taxes are the most predictable piece — the FICA match alone is 7.65%, and unemployment insurance adds a bit more. Benefits vary more: a company covering a family health plan can spend more per employee on insurance than one offering a leaner package.
The fully-loaded hourly figure is the number that matters for pricing and profitability math. If a billable team member costs $52 per hour fully loaded, charging clients $60 leaves almost nothing after the non-billable time everyone inevitably has. Service businesses that price from raw salary instead of loaded cost wonder where the money goes.
Do not forget the one-time column: equipment, onboarding time, and the productivity ramp (most hires take 3–6 months to reach full output) mean the first year of a hire is materially more expensive than the run rate. Plan cash accordingly, especially when hiring several people at once.
Frequently asked questions
What does an employee really cost beyond salary?
Typically 25–40% more in the US: employer payroll taxes (~8–12%), health insurance and benefits (10–25%), plus equipment, software and workspace overhead.
How much is the employer side of payroll tax?
Employers match the employee’s 7.65% FICA (6.2% Social Security up to the wage base + 1.45% Medicare) and pay federal and state unemployment insurance, adding roughly 8–12% total.
What is a benefits load percentage?
Benefits cost expressed as a share of salary. Health coverage is the biggest driver; 20% is a lean package, 30%+ is common at companies with strong plans.
Contractor vs employee — how do costs compare?
Contractors bill 30–50% above the salaried equivalent but come with no benefits, payroll tax or overhead. Breakeven usually lands around 1,500–1,800 hours of annual need.