Employee Cost Calculator
The salary you offer is only part of what a hire actually costs. This free employee cost calculator — a true cost of an employee calculator and cost of hiring an employee calculator in one — adds the employer share of payroll taxes (FICA, FUTA and SUTA), workers' compensation, health insurance and retirement matching on top of base salary, then shows the total true cost, the burden percentage above salary, and the real cost per hour. Edit any rate or benefit to match your own estimate before you make an offer.
Estimate only — not payroll or tax advice. FICA uses the 2025 Social Security wage base of $176,100; FUTA is 0.6% on the first $7,000 of wages. SUTA rates and wage bases, workers' compensation rates and benefit costs vary by state, industry and provider — the defaults here are user-editable estimates, so replace them with your own figures.
Frequently asked questions
What is the true cost of an employee beyond salary?
Beyond base salary, an employer pays the employer share of Social Security and Medicare, federal and state unemployment insurance (FUTA and SUTA), workers' compensation insurance, and — where offered — health insurance, retirement matching, paid leave cover, training, equipment and software. Add those lines together and the total cost of hiring an employee is meaningfully higher than the salary alone. Enter your own rates and benefits above to see the full picture for a specific role.
What payroll taxes do employers pay?
Employers pay FICA — 6.2% for Social Security on wages up to the annual wage base ($176,100 for 2025) plus 1.45% for Medicare on all wages — which mirrors the employee share withheld from paychecks. They also pay FUTA, the federal unemployment tax, at 0.6% on the first $7,000 of each employee's wages after the standard state credit, and SUTA, state unemployment tax, which is also commonly applied to the first $7,000 (the wage base and rate vary by state and by employer). Workers' compensation insurance is a further employer cost, priced as a percentage of payroll that depends on the job's risk class.
How much does an employee really cost per hour?
Divide the total true annual cost — salary plus all employer taxes and benefits — by the hours worked in a year. This calculator uses 2,080 hours (40 hours a week for 52 weeks). That is why the true cost of an employee per hour is always higher than the headline hourly rate you would get by dividing salary alone by 2,080: every employer tax and benefit is spread across those same hours. Compare the result with a contractor quote to see which option really costs less.
Related tools: see the employee's side of the same numbers with our paycheck calculator, or convert pay rates both ways with our salary to hourly calculator.