Employee Cost Calculator

Calculate the true total cost of an employee including salary, benefits, payroll taxes, workers' comp, training, and equipment.

The salary on an offer letter is only part of what an employee actually costs a business -- this calculator adds the layers employers routinely forget when budgeting headcount. Benefits Rate applies a single blended percentage to salary to represent health insurance, dental, retirement matching, and similar ongoing costs, since a line-item breakdown of every benefit plan is more detail than a quick estimate needs. Payroll Tax Rate represents only the EMPLOYER'S share of FICA (Social Security and Medicare) -- the 7.65% default reflects the employer-side statutory rate, not the combined employer-plus-employee rate, and does not include the employee's own withheld share, which never appears on the employer's books. It is also applied as a flat percentage of the full salary with no cap: in reality, only the 6.2% Social Security portion of that 7.65% stops accruing once salary crosses the annual wage base ($184,500 for 2026), so this calculator overstates payroll tax cost at high salaries above that threshold -- treat Payroll Tax Rate as most accurate below the wage base and a conservative (slightly high) estimate above it. This calculator also doesn't model FUTA or state unemployment insurance (SUTA), both real employer-side payroll costs on top of FICA -- FUTA is typically a small effective 0.6% on the first $7,000 of wages after the standard credit, while SUTA varies by state and industry, commonly 1-6% on a state-specific wage base. Workers' Comp is added as a separate percentage since its rate varies enormously by job classification and state. Training Cost and Equipment Cost are one-time, first-year figures (onboarding, a laptop, initial certifications) rather than recurring annual costs, so Total Annual Cost is most accurate for year one and would overstate ongoing cost in later years unless those two figures are re-entered as zero. Effective Hourly Rate divides Total Annual Cost by 2,080 hours (a standard 40-hour, 52-week work year), and Overhead Multiplier expresses Total Annual Cost as a multiple of salary alone -- a useful shorthand ("this role costs about 1.4x salary") that employers commonly use for quick budgeting, though note the multiplier is diluted, not inflated, by higher salaries here, since the two one-time cost inputs are fixed dollar amounts that shrink as a share of a larger salary.