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Employee Cost Calculator
See what an employee really costs once taxes and benefits are added to their wage.
How this calculator works
The calculator multiplies the hourly wage by hours per week and 52 weeks to get yearly pay, then adds your percentage for payroll taxes and benefits. It shows the total yearly cost and the cost for each hour worked. Typical add-ons include employer payroll taxes, health insurance, retirement contributions, paid time off and workers’ compensation.
Example
An employee earns $22 an hour for 40 hours a week and your taxes and benefits add 25%. The calculator shows: Annual Cost: $57,200.00 · Per Hour: $27.50.
Tips
- Ask your accountant or payroll provider for your actual percentage. It varies by state, benefits offered and insurance.
- Remember equipment, training and software, which are not part of this percentage.
- Compare the cost per hour with what you charge. Your price has to cover more than just the wage.
Common questions
What percentage should I use for taxes and benefits?
It depends on your situation. A common planning range is 20% to 40% of wages, but check your actual payroll and benefit costs.
Does this include paid time off?
Only if you add it to your percentage. Paid time off is a real cost, since you pay for hours not worked.
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Results are estimates only. See our disclaimer.