Employee Cost Calculator
True yearly cost of an employee beyond salary, and cost per productive hour.
About this tool
Enter the salary, bonus, employer payroll tax and pension percentages, health insurance and other benefits, equipment and software, training, the one-off recruiting cost and how long you expect them to stay, contract hours, and days off for holidays, sickness and training. The calculator shows the total yearly and monthly cost, the multiple of salary, the cost per paid hour and the cost per productive hour.
What an employee really costs
Salary is only part of the cost of employing someone. Employers also pay payroll taxes, such as US Social Security and Medicare at 7.65% plus unemployment taxes, or employer National Insurance in the UK. On top come pension or 401(k) contributions, health insurance and other benefits, a laptop and software licences, training, and recruiting costs spread over the time the person stays. In the example, a 45,000 salary becomes a total cost of about 62,100, a multiple of 1.38, within the 1.25โ1.4 range often quoted. Productive hours are fewer than paid hours once holidays, sick days and training are taken out, so the cost per productive hour is noticeably higher than the cost per paid hour. That figure is what you need to recover when pricing services, and it is the fair comparison when deciding between hiring and using a contractor. Honest limits: tax rates, thresholds and caps differ by country and change every year, so enter your own figures. Office space, management time and overheads are not included. Not tax or legal advice. The freelance rate calculator, the payslip generator and the meeting cost calculator are related. Gross vs net salary: what comes off your pay, and how to compare offers explains the employee's side.
Frequently asked questions
How much does an employee cost on top of salary?
Commonly 25โ40% more, from employer taxes, pension, benefits, equipment, training and hiring costs.
What is the loaded labour cost?
The full cost of an employee including all benefits and employer costs, often expressed as a multiple of salary such as 1.3ร.
How do I work out cost per productive hour?
Divide the total yearly cost by the hours actually worked after holidays, sick days and training.
Is my data saved?
No. The calculation runs in your browser and nothing is stored or sent.