calculator template · Free download
Employee Cost Calculator
Calculate the true cost of an employee: salary, 2026 FICA, FUTA, SUTA, workers' comp, benefits, 401(k), equipment, and recruiting. $70,000 worked example.
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Employee cost calculator
Estimate what one US employee costs per year on top of salary: employer payroll taxes, workers' comp, benefits and equipment. Defaults are placeholders; replace them with your state rate notice, insurance quote and benefits invoice.
- Salary
- $70,000
- Social Security (6.2%)
- $4,340
- Medicare (1.45%)
- $1,015
- FUTA (0.6% of first $7,000)
- $42.00
- SUTA
- $189.00
- Workers' comp
- $210.00
- Health, retirement and other benefits
- $13,000
- Equipment and software
- $3,000
- Total annual cost
- $91,796
- Cost multiplier (total ÷ salary)
- 1.31x
- Cost per paid hour (÷ 2,080)
- $44.13
Social Security stops at the 2026 wage base of $184,500 (SSA). FUTA assumes the full 5.4% state credit; employers in a credit-reduction state pay more. One-off recruiting and onboarding costs are not included.
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What you get
- A free on-page calculator: enter salary, SUTA rate, workers' comp and benefits to get the total cost and multiplier
- A line-by-line cost model with the 2026 Social Security wage base, FUTA, and Medicare rates
- A fully worked $70,000 example with every cost line, the total, and the cost multiplier
- Cost per paid hour and cost per productive hour so you can compare employees with contractors
- A blank calculator table for your own roles
- FUTA credit reduction rules, plus UK employer NIC and India PF, ESI, and gratuity notes
Template preview
A preview of the structure. Download the PDF or CSV for the complete, ready-to-use version.
Inputs
- Role and work location (state / country)— Location drives SUTA, state taxes, and workers' comp
- Annual base salary or hourly rate x hours— e.g. $70,000, or $25/hr x 2,080 = $52,000
- Target bonus / commission / expected overtime— Include if it is likely to be paid
- Your SUTA rate and taxable wage base— From your state rate notice, e.g. 2.5% on $15,000
Statutory employer taxes (US, 2026)
These are set by law and apply on top of salary. The employer pays them; they are not deducted from the employee.
Employer tax rates
| Tax | Employer rate | Wage base | Source |
|---|---|---|---|
| Social Security (OASDI) | 6.2% | First $184,500 of wages in 2026 | SSA, ssa.gov/oact/cola/cbb.html |
| Medicare (HI) | 1.45% | All wages, no cap (the 0.9% Additional Medicare tax is employee-only) | IRS Publication 15 |
| FUTA | 6.0% gross, 0.6% net after the 5.4% state credit | First $7,000 per employee per year | IRS, Form 940 instructions |
| FUTA credit reduction (2025) | California +1.2%; U.S. Virgin Islands +4.5% | First $7,000 | DOL, oui.doleta.gov/unemploy/futa_credit.asp |
FUTA credit reduction: what it means for your budget
Employers normally pay 0.6% FUTA on the first $7,000 of each employee's wages ($42 a year) because state unemployment tax earns a 5.4% credit. When a state carries an unpaid federal unemployment loan for two or more consecutive January 1s and does not repay it by November 10, employers there lose part of that credit. For 2025 the Department of Labor's final list set California at a 1.2% reduction and the U.S. Virgin Islands at 4.5%; Connecticut and New York repaid in time and had 0.0%. A California employer therefore paid 1.8% on $7,000, or $126 per employee, for 2025. For 2026, DOL lists California (potential 1.5% plus a possible benefit-cost-rate add-on, preliminary total 5.3%) and the U.S. Virgin Islands (potential 4.8%) as at risk. The final figures are set after November 10, 2026 and are paid with Form 940 in January. Budget for them if you have staff in those jurisdictions.
SUTA: state unemployment tax
Every state sets its own taxable wage base and rate schedule. New employers get a new-employer rate for their first years; after that the rate is experience-rated, rising or falling with the unemployment claims charged to your account. Wage bases range from the federal floor of $7,000 in a few states to more than $70,000 in others, and rates for established employers can run from well under 1% to more than 6%. Use the rate on your annual state notice, not an average. Some states also add small surcharges such as training or administrative assessments.
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How to use this template
- 1
Start with base pay
Enter annual salary, or hourly rate x expected annual hours. Add expected overtime, bonus, and commission at target.
- 2
Add statutory employer taxes
Calculate employer Social Security, Medicare, FUTA, and your state unemployment tax using your own assigned SUTA rate and wage base, plus workers' compensation at your class-code rate.
- 3
Add benefits and retirement
Use the employer share of premiums from your renewal, not the total premium, and the match formula from your plan document at the expected deferral rate.
- 4
Add overhead and one-time costs
Include equipment, software seats, payroll and benefits admin fees, training, and recruiting. Spread one-time costs over expected tenure, typically three years.
- 5
Divide to get the multiplier
Divide total annual cost by base salary. Most US salaried roles land between 1.25x and 1.4x; use your own figure for budgets and offer decisions.
Frequently asked questions
How much does an employee cost on top of salary?
Typically 25% to 40% more than base salary for a US salaried role, or a 1.25x to 1.4x multiplier. The worked example here shows a $70,000 employee costing $92,667 a year, or 1.32x, once employer taxes, health insurance, 401(k) match, equipment, recruiting, and admin are included. Family health coverage or rich benefits push it higher.
What payroll taxes does an employer pay?
Employer Social Security at 6.2% on wages up to $184,500 in 2026, Medicare at 1.45% on all wages, FUTA at a net 0.6% on the first $7,000 per employee, and state unemployment tax at the rate your state assigns. Some states add their own programs, such as paid family leave or training surcharges.
What is the FUTA credit reduction?
A cut to the 5.4% credit employers get against the 6.0% FUTA rate, applied when a state has not repaid federal unemployment loans. For 2025, California employers paid an extra 1.2% on the first $7,000 per employee and U.S. Virgin Islands employers an extra 4.5%. DOL publishes the final list for each year after November 10.
How do I calculate the true hourly cost of an employee?
Divide total annual cost by hours. Using 2,080 paid hours gives cost per paid hour; subtracting PTO and holidays gives productive hours, which is the fairer number to compare with a contractor's rate. In the example, $92,667 over 1,872 productive hours is $49.50 an hour, against a salary-only rate of $33.65.
Is it cheaper to hire a contractor than an employee?
Sometimes, but compare like for like. A contractor's hourly rate should be set against the employee's cost per productive hour, not salary alone. And the choice is not only a cost decision: misclassifying someone who works like an employee triggers back taxes, penalties, and benefits liability under IRS and Department of Labor tests.
How much does employer National Insurance cost in the UK?
For 2026 to 2027, employer Class 1 NIC is 15% of earnings above £5,000 a year. On a £50,000 salary that is £6,750. Eligible employers can offset up to £10,500 a year through the Employment Allowance, and auto-enrolment adds at least 3% of qualifying earnings.