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Employee True Cost

A $50,000 salary is a $62,000 decision.

Salary is the sticker price, not the cost. Employers pay their own side of FICA, federal and state unemployment tax, workers' comp, and whatever benefits they offer — typically 1.2× to 1.4× the salary. This calculator builds the real number so hiring, pricing, and "can I afford help" decisions use true costs.

Why people use this

Owners use it before posting the job: pricing a role off the wage instead of the loaded cost is how small businesses quietly go underwater. It converts "can we afford help?" into a per-hour number you can build into quotes.

How it works

1. Enter the gross salary.
2. Add what you pay for health insurance, your state unemployment rate, workers' comp rate, and any 401(k) match.
3. Read the true annual cost, the multiplier, and the honest cost per hour.

Common questions

What percentage should I budget on top of salary?

The classic range is 1.25×–1.4× for benefits-plus-taxes. Taxes alone (employer FICA, FUTA, SUTA, workers' comp) usually run 10–13%; health insurance adds $6,000–$15,000; a 3% retirement match adds 3%. Labor-intensive businesses price jobs off the loaded hourly cost, never the wage.

What is the employer share of payroll tax?

7.65% of wages: 6.2% Social Security up to the $184,500 wage base (2026) plus 1.45% Medicare with no cap. Add FUTA at 0.6% on the first $7,000 and state unemployment at your assigned rate — new employers typically start around 2.7% on a state-specific wage base.

Is it cheaper to use a 1099 contractor?

On paper, yes — no employer taxes or benefits. But only if the working relationship is genuinely independent: the IRS reclassifies mislabeled employees and bills the employer for back taxes. Compare rates honestly with the 1099 vs W-2 calculator.

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