👥Employee Cost Calculator

Calculate the total cost of hiring an employee including benefits and taxes.

Annual Salary ($)

Benefits (%)

Health, dental, vision, 401k, etc.

Employer Tax Rate (%)

US default: 7.65% (FICA)

Base Salary	$60,000.00
Benefits (20%)	$12,000.00
Employer Taxes (7.65%)	$4,590.00
Total Annual Cost	$76,590.00
Monthly Cost	$6,382.50
Hourly Cost (2080 hrs/yr)	$36.82/hr

About Employee Cost Calculator

The Employee Cost Calculator reveals the true cost of employment beyond the base salary — factoring in payroll taxes, health benefits, retirement contributions, equipment, and overhead. This tool helps business owners make informed hiring decisions and budget accurately for headcount expansion.

How to Use Employee Cost Calculator

1
Enter the base salary
Input the employee's annual gross salary as the starting figure.
2
Add taxes and benefits
Enter your employer payroll tax rate and any benefit costs such as health insurance premiums, retirement match, and paid leave.
3
Review the total employment cost
See the complete annual cost breakdown including all additional expenses, giving you a clear picture of the true hiring cost.

Common Use Cases

Business owners budgeting for their first or next full-time hire
HR managers preparing headcount cost summaries for board presentations
Startups comparing the cost of employees versus independent contractors
Finance teams modeling the impact of salary increases on total payroll

Frequently Asked Questions

Why is the true cost of an employee higher than their salary?

In addition to salary, employers typically pay payroll taxes (Social Security, Medicare), health insurance premiums, retirement contributions, paid time off, equipment costs, and a share of office overhead — often adding 20–40% on top of base pay.

What inputs does the calculator require?

You enter the employee's annual salary, your employer tax rate, benefit costs such as health insurance and retirement match, plus any equipment or overhead allocations.

Can I compare the cost of full-time versus contractor hiring?

Yes — run the calculator for a salaried employee with benefits, then compare the result against a contractor's hourly or project rate to see which is more cost-effective for your situation.