How much more than salary does an employee really cost?

For most small employers, the fully loaded cost is about 1.25 to 1.4 times pay once taxes, benefits, workers' comp, and overhead are included. Richer benefits push it higher.

Are these numbers exact?

They are planning estimates. Federal payroll tax figures use 2026 rates. State unemployment, workers' comp, and benefit costs vary by employer, so adjust the inputs to match yours.

Why does paid time off change the hourly cost?

Paid time off is paid but not worked, so the same annual cost spread over fewer worked hours raises the cost of each hour on the job.

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True Cost of an Employee Calculator

Salary is only part of the story. Add payroll taxes, every benefit, workers' comp, paid time off, payroll admin, and overhead, and the real number is usually 1.25 to 1.4 times pay. Use this to budget a hire, set a bill rate, or sanity check an offer.

Pay

Annual base salary

Scheduled hours per week

Bonus or commission (per year)

Average annual variable pay for the role. Leave 0 if none.

Benefits

Employer health insurance (per year)

Employer share typically $7,000 to $15,000 per employee per year.

Other benefits: dental, vision, life, disability (per year)

Retirement match

Workers' comp

Overhead and admin

Payroll / HR admin or PEO (per year)

Other costs (per year)

Software, equipment, training, and workspace tied to the role on an ongoing basis.

Time off and tax assumptions

Paid time off (days)

Paid holidays (days)

Paid time off does not add dollars, but it spreads the cost over fewer worked hours, which raises the effective hourly cost.

State unemployment (SUTA)

SUTA wage base

Federal payroll taxes are applied automatically: employer Social Security 6.2% on wages up to $184,500 (2026), Medicare 1.45%, and FUTA 0.6% on the first $7,000. SUTA varies by state.

First-year one-time costs (optional)

These are one-time, not part of the ongoing annual cost. Fill them in to also see a first-year total.

Recruiting and hiring

Onboarding and training

Equipment and setup

Fully loaded annual cost

0x pay

Per month

Effective hourly cost

For every $1 of pay, you spend about $0 once everything is counted.

First-year cost, including one-time setup: $0

Where the money goes

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What goes into the true cost of an employee

Base pay is the part everyone sees. The fully loaded cost adds everything you spend to keep that person employed for a year. For most small employers it lands between 1.25 and 1.4 times pay. Here is what this calculator counts.

Cash pay

Base salary or wages, plus any bonus or commission. Variable pay is taxable wages too, so it also drives the payroll taxes below.

Employer payroll taxes

On top of an employee's own withholding, you pay a matching 7.65% in Social Security and Medicare, plus federal unemployment (FUTA) and your state's unemployment tax (SUTA). FUTA and SUTA apply only to the first slice of wages each year.

Benefits

Employer-paid health insurance is usually the largest add-on after pay. Dental, vision, life, and disability coverage and a retirement match stack on top.

Workers' comp, admin, and overhead

Workers' compensation is a percentage of wages that varies widely by industry and state. Payroll or PEO fees, software, equipment, training, and workspace round out the ongoing cost.

Ongoing versus first year

The headline number is the ongoing annual cost. The optional first-year view adds one-time recruiting, onboarding, and equipment setup, which only hit in year one.

How much more than salary does an employee really cost?: For most small employers, the fully loaded cost is about 1.25 to 1.4 times pay once taxes, benefits, workers' comp, and overhead are included. Richer benefits push it higher.
Are these numbers exact?: They are planning estimates. Federal payroll tax figures use 2026 rates. State unemployment, workers' comp, and benefit costs vary by employer, so adjust the inputs to match yours.
Why does paid time off change the hourly cost?: Paid time off is paid but not worked, so the same annual cost spread over fewer worked hours raises the cost of each hour on the job.

This calculator gives estimates only and is not tax, legal, or accounting advice. It uses 2026 federal payroll tax rates; state unemployment, workers' comp, and benefit costs vary by employer. Confirm specifics with a qualified professional.

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