True Employee Cost Calculator
Base pay is the sticker price, not the bill. Add employer payroll taxes, insurance, retirement match, equipment and overhead to see the fully loaded annual cost, the multiplier over salary, and what an hour of actual work costs you.
The role
Employer taxes & insurance
Benefits & overhead
How to use this calculator
1. Start with the number you would put in an offer
Pick the pay basis, enter the salary or hourly wage, and set scheduled hours per week. If the role reliably earns a bonus, commission or regular overtime, fold that into base pay now — those dollars are wages and they attract every payroll tax the base rate does, so leaving them out flatters the multiplier.
2. Set the tax fields to your own numbers
Social Security and Medicare are federal and fixed, so the calculator applies them for you and stops Social Security at the annual wage base. The three fields you should personalize are the SUTA rate from your state unemployment notice, the SUTA wage base for that state, and the workers' compensation rate for the job classification. A desk job and a roofing crew can differ by more than ten percentage points of payroll.
3. Be honest about benefits and overhead
Use the employer share of the health premium, not the total premium, and use the retirement match you expect people to actually claim rather than the headline offer. Overhead is the line most often left at zero: desk space, a phone line, software seats and travel budget are real money even when nobody invoices you for them monthly.
4. Read the cost per worked hour, not the cost per paid hour
Once the result appears, the last tile is the one that should drive pricing. It divides the full annual cost by the hours you actually get after paid time off and holidays come out. Use it as the floor under any billing rate or project quote, then add your target margin on top.
Employee cost FAQs
What is the employee cost multiplier?
The multiplier is fully loaded annual cost divided by base pay. A salaried US role with ordinary benefits usually lands between 1.25× and 1.40×, meaning a $100,000 salary costs $125,000 to $140,000 once employer taxes, insurance, retirement match and overhead are counted. Rich health plans, generous matches or expensive equipment push it past 1.5×; a lean remote role with no benefits can sit near 1.10×.
Which payroll taxes does an employer pay on top of wages?
Employers match the employee half of FICA: 6.2% for Social Security up to the annual wage base, and 1.45% for Medicare with no ceiling. Employers alone pay FUTA — effectively 0.6% on the first $7,000 of each worker's wages after the standard state credit — plus state unemployment tax (SUTA) at an experience-rated percentage applied to a state-specific wage base. Employers do not match the additional 0.9% Medicare surtax that high earners pay.
Why does cost per worked hour matter more than cost per paid hour?
Paid time off, holidays and sick leave are hours you pay for but get no output from. A 40-hour week is 2,080 paid hours a year, but 20 days of PTO and holidays removes 160 of them, leaving 1,920 hours of actual work. The full annual cost still has to be recovered across those 1,920 hours, so cost per worked hour is the number to use when you price a project or set a billing rate.
Should equipment and onboarding be spread over the whole tenure?
Yes — that is the honest way to read it. A laptop, desk setup, background check and the first weeks of training are a one-time outlay, but they buy the entire employment relationship. Dividing them by expected tenure gives a per-year figure you can compare against salary. Short expected tenure makes the same setup cost far more per year, which is exactly why turnover is expensive: drop tenure from three years to one and watch the multiplier jump.
Does this calculator work for hourly employees?
Yes. Switch the pay basis to hourly and enter the wage plus scheduled hours per week. Annualized base pay becomes rate × hours × 52 weeks, and every burden item is applied to that figure. The model assumes scheduled hours are paid, including paid time off. If your hourly staff take unpaid leave, set paid time off days to zero and lower scheduled hours per week instead.
Are overtime, bonuses and commissions included?
Not automatically. Base pay is the figure everything else is calculated from, so the cleanest approach is to add expected bonus, commission or overtime into base pay before you calculate. Those payments are wages, so they carry employer FICA, unemployment tax and workers' compensation exactly the way regular pay does, and folding them in keeps the multiplier honest.