Free HR calculator
True Cost of an Employee Calculator
Calculate the annual and hourly cost of an employee, including pay, employer taxes, benefits, workers’ compensation, paid time off, and overhead.
Your estimate
Method note The fully loaded cost of an employee Note reviewed:
Start with employee pay Enter pay, scheduled hours, bonuses, and benefits. About three minutes.
Pay
This calculator is built on United States payroll rules, so amounts are in US dollars.
Benefits
Other benefits and employee costs
Time off and tax assumptions
One-time first-year costs (optional)
Total annual employee cost
Annual cost breakdown
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How the calculation works
What goes into employee cost
Pay is the starting point. Employer taxes, benefits, workers’ compensation, and overhead add to the total. A common planning range is 1.25 to 1.4 times pay.
The health insurance starting figure comes from KFF’s 2025 Employer Health Benefits Survey. It reported average employer contributions of about $7,900 for single coverage and $20,100 for family coverage.
Source reviewed 9 October 2026: KFF, 2025 Employer Health Benefits Survey, published 22 October 2025, kff.org.
See the calculation
Pay and bonuses
Payroll tax calculations include annual salary or hourly wages, plus expected bonuses and commissions.
Employer payroll taxes
Employer Social Security and Medicare total 7.65%, made up of 6.2% Social Security up to the annual wage base and 1.45% Medicare on all wages. Federal and state unemployment taxes use their applicable wage bases, including FUTA on the first $7,000 of each employee’s wages.
Benefits
Include the amount your business pays toward health coverage, other insurance, and retirement matching.
Workers’ compensation and overhead
Include workers’ compensation, payroll administration, software, equipment, and other expenses associated with the position.
Annual and first-year costs
Annual cost includes recurring employment expenses. First-year cost also includes recruiting, onboarding, and initial setup.
Put your results to work
Weigh employee costs across roles
Use the Excel workbook to compare the full cost of different roles and offers. Adjust pay, benefits, and overhead assumptions for each position. The formulas are visible and editable.
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Compare this estimate with your records to help plan your next step.