Payroll · 2026
True Cost of an Employee Calculator
Salary is roughly 70–85% of what an employee costs. This adds the employer taxes and overhead that a salary figure hides.
Varies by state and your claims history. Check your state rate notice.
- Cost as a multiple of salary
- 1.28×
- Employer Social Security (6.2%)
- $4,650.00
- Employer Medicare (1.45%)
- $1,087.50
- FUTA
- $42.00
- SUTA
- $243.00
- Health, retirement, workers comp
- $12,000
- Monthly cost
- $8,001.88
Transparent method
How this calculator works
- Add employer Social Security and Medicare tax to salary.
- Add FUTA and the entered state unemployment rate up to their wage bases.
- Add health coverage, retirement match, workers compensation, equipment, software, and training.
What the result does not include
- State and local payroll rules vary, and FUTA credit-reduction states can pay more than the default federal amount.
- Overtime, bonuses, paid leave administration, recruiting, and severance are included only if you add them to other costs.
Common questions
Why is FUTA so small?
FUTA is 6% but employers in states that comply with federal rules get a 5.4% credit, leaving an effective 0.6% on only the first $7,000 of wages. A handful of credit-reduction states pay more — check yours.
What multiplier should I expect?
For most small employers the true cost lands between 1.25× and 1.4× salary. Above 1.5× usually means generous health coverage or a high workers comp classification.
Does this apply to contractors?
No. You pay a 1099 contractor their invoice with no employer FICA, FUTA, SUTA, or benefits — which is exactly why worker classification is enforced. Misclassifying an employee as a contractor carries back taxes and penalties.