Employee Cost Calculator
Enter a salary or hourly wage, employer payroll taxes, benefits, retirement match, equipment and overhead to see the fully loaded annual cost of an employee, the cost multiplier and the true cost per working hour. Calculated privately in your browser.
Pay
Vacation + holidays + sick days
Employer payroll taxes
$184,500 for 2026 ($176,100 in 2025)
No wage cap for the employer share
6.0% minus the 5.4% state credit
Your state assigns your rate
Varies by state ($7,000 to $70,000+)
Benefits & other costs
Where the money goes
Estimates only, not tax or legal advice. Tax rates and wage bases change every year and SUTA rates differ by state and employer, so confirm the figures with your payroll provider or tax adviser.
How to use the Employee Cost Calculator
- Choose Salary or Hourly and enter the pay, hours per week and any yearly bonus or commission.
- Set payroll taxes: keep the US preset and enter your state's SUTA rate and wage base, or switch to a custom percentage of wages.
- Add benefits: the employer share of health insurance per month, other benefits and the retirement match as a % of pay.
- Add other costs: equipment and software, training and perks, and an overhead % for office space and admin.
- Read the results: total annual cost, cost multiplier and true hourly cost after paid days off, with the full breakdown. Copy or download it as CSV.
US employer payroll taxes for 2026
| Tax | Employer rate | Wage base | Max per employee |
|---|---|---|---|
| Social Security (OASDI) | 6.2% | $184,500 | $11,439 |
| Medicare (HI) | 1.45% | No limit | No limit |
| FUTA | 6.0%, or 0.6% after the full 5.4% state credit | $7,000 | $42 (with full credit) |
| SUTA | Set by your state (new employers often 1–4%) | Set by your state | Varies |
Sources: Social Security Administration 2026 contribution and benefit base; IRS Publication 15 (Circular E) for FICA and FUTA. Employers in a FUTA credit reduction state pay a higher effective FUTA rate. The employee pays a matching 6.2% and 1.45% through withholding, which is not an employer cost.
Worked example: $65,000 salary
| Cost item | Calculation | Per year |
|---|---|---|
| Salary + bonus | $65,000 + $3,000 | $68,000 |
| Social Security | 6.2% × $68,000 | $4,216 |
| Medicare | 1.45% × $68,000 | $986 |
| FUTA + SUTA | 0.6% × $7,000 + 2.7% × $7,000 | $231 |
| Workers' comp | 0.5% × $68,000 | $340 |
| Health + other benefits | ($550 + $60) × 12 | $7,320 |
| Retirement match | 4% × $68,000 | $2,720 |
| Equipment, software, training | $2,500 + $1,000 | $3,500 |
| Overhead | 10% × $65,000 | $6,500 |
| Total | 1.44 × base salary | $93,813 |
With 20 paid days off the employee works 2,080 − 160 = 1,920 hours, so the true cost is $93,813 ÷ 1,920 = $48.86 per working hour, compared with a pay rate of $31.25 per paid hour. To convert pay rates, use the salary to hourly calculator.
Using the result
- Pricing services: bill clients on the true hourly cost plus your margin, not the wage. The profit margin calculator turns a cost into a price.
- Hiring vs contracting: compare the fully loaded cost with a contractor's rate; contractors cover their own taxes, benefits and equipment.
- Budgeting headcount: plan new hires at the total cost, not the salary, in your budget.
Frequently asked questions
How much does an employee really cost?
As a rule of thumb an employee costs 1.25 to 1.4 times their base salary once payroll taxes, benefits and overhead are added, and more with generous benefits or expensive office space. For a $65,000 salary with typical US benefits the default example comes to about $93,800 a year, a multiplier of about 1.44.
What payroll taxes does a US employer pay?
Employers pay Social Security tax of 6.2% on wages up to the annual wage base ($184,500 in 2026), Medicare tax of 1.45% on all wages, federal unemployment tax (FUTA) of 6.0% on the first $7,000 per employee, usually reduced to 0.6% ($42) by the state credit, and state unemployment tax (SUTA) at a rate and wage base set by the state.
Does the employer pay the additional 0.9% Medicare tax?
No. The Additional Medicare Tax of 0.9% on wages above $200,000 is paid only by the employee; the employer withholds it but does not match it. The employer share of Medicare stays at 1.45% of all wages.
What is the true hourly cost of an employee?
It is the total annual cost divided by the hours actually worked. Paid vacation, holidays and sick days are paid but not worked, so with 20 days off a full-time employee works about 1,920 of 2,080 paid hours, which raises the real cost of each productive hour.
What should I include in overhead?
Overhead covers costs that grow with headcount but are not paid to the employee: office rent and utilities per desk, HR and payroll software, accounting, recruiting, management time and supplies. Many small businesses use 10–20% of salary; enter 0 if you work remotely with no extra overhead.
Can I use this outside the United States?
Yes. Switch the tax setup to Custom % of wages and enter your country's employer social security or payroll charges as a percentage, then pick your currency. Health insurance can be set to 0 where it is covered by public insurance.