Employee Cost Calculator
Discover the true cost of hiring an employee beyond base salary. Calculate employer taxes, benefits, equipment, overhead, and get your burden rate.
Employee Cost Calculator
Calculate the true cost of an employee beyond base salary.
Note: Uses 2024 US employer tax rates. Actual costs vary by state and benefits package.
Burden rate = Total Cost ÷ Base Salary (typically 1.25x - 1.4x)
What's Included in Employee Cost?
The true cost of an employee extends far beyond the base salary. Here's what employers actually pay.
Employer Taxes
7.65-10% of salarySocial Security, Medicare, FUTA, SUTA - mandatory payroll taxes
Health Insurance
8-15% of salaryMedical, dental, vision coverage - employer contribution
Retirement Benefits
3-6% of salary401(k) matching, pension contributions
PTO & Holidays
8-12% of salaryPaid time off, sick leave, holidays - paid non-productive time
Equipment & Tools
2-4% of salaryComputer, software, phone, office supplies
Overhead
5-10% of salaryOffice space, utilities, HR administration
Understanding Burden Rate
What is Burden Rate?
The burden rate is a multiplier that represents the ratio of total employee cost to base salary. It helps businesses understand and budget for the true cost of labor.
Burden Rate = Total Employee Cost ÷ Base SalaryTypical Burden Rates
When to Use This Calculator
Hiring Decisions
Understand the full financial commitment before extending an offer. Budget accurately for new positions.
Project Costing
Calculate accurate labor costs for project budgets and client billing using fully loaded rates.
Contractor vs Employee
Compare the true cost of hiring an employee versus using contractors or freelancers.
Workforce Planning
Plan headcount budgets accurately by understanding the full cost of each position.
Frequently Asked Questions
What is the true cost of an employee?
The true cost of an employee includes base salary plus employer taxes (Social Security, Medicare, FUTA, SUTA), benefits (health insurance, retirement matching, PTO), equipment, overhead (office space, utilities), training, and amortized recruitment costs. Typically, the true cost is 1.25x to 1.4x the base salary.
What is a burden rate for employees?
The burden rate (also called the burden multiplier) is the ratio of total employee cost to base salary. A burden rate of 1.35 means for every $1 of salary, you pay $1.35 in total cost. This multiplier helps budget for the full cost of hiring and is essential for project costing and billing rates.
What employer taxes do I pay for employees?
In the US, employers pay: Social Security (6.2% up to $168,600), Medicare (1.45% uncapped), FUTA (0.6% on first $7,000), and SUTA (varies by state, typically 2-5% on first $7,000-$56,000). Combined, employer taxes typically add 7.65-10% to base salary.
How much do employee benefits cost employers?
Employee benefits typically cost 20-40% of base salary. Health insurance averages $7,500-$15,000 per employee annually. 401(k) matching adds 3-6% of salary. PTO value equals daily rate × days off. Life insurance and disability add 0.5-1% of salary.
How do I calculate cost per hour for an employee?
Divide total annual employee cost by annual work hours. For full-time employees, use 2,080 hours (40 hours × 52 weeks). A $75,000 salary employee with 1.35x burden rate costs $101,250/year or $48.68/hour fully loaded. This rate is essential for project pricing and contractor comparisons.
Need HR Planning Templates?
Download our HR templates for compensation planning, workforce budgeting, and benefits administration.