Employee Cost Calculator
The full yearly cost of an employee: salary plus employer taxes, benefits and other costs, per month and per hour.
Your employee
Filled in with example values. Replace them with your own.
Optional
Divides the yearly cost by the hours actually worked. The Work Hours Calculator can work these out.
Currency symbol
Results update as you type.
Result
Total employee cost: $69,250.00 a year ($5,770.83 a month), 1.26× the salary
Total cost of the employee
$69,250.00a year
- Per monthYearly ÷ 12
- $5,770.83
- Salary
- $55,000.00
- Employer taxes10% of salary
- $5,500.00
- Retirement match3% of salary
- $1,650.00
- Health insurancePer year
- $4,800.00
- EquipmentPer year
- $1,500.00
- TrainingPer year
- $800.00
What the employee costs
- Salary
- $55,000.00
- Employer taxes
- $5,500.00
- Health insurance
- $4,800.00
- Retirement match
- $1,650.00
- 2 other costs
- $2,300.00
- Total a year
- $69,250.00
How it’s calculated
Employer taxes
$55,000.00 × 10% = $5,500.00
Retirement match
$55,000.00 × 3% = $1,650.00
Total cost
$55,000.00 + $14,250.00 = $69,250.00
Multiplier
$69,250.00 ÷ $55,000.00 = 1.26×
How the employee cost calculator works
Enter the employee’s yearly salary and list what the employer pays on top of it, each as a percentage of salary or a yearly amount. The calculator adds them up to give the total yearly cost, the cost per month, how many times the salary that is and, if you enter working hours, the cost per hour actually worked.
The formula
Employer cost = Salary × Rate %, or a yearly amount
Total cost = Salary + Σ Employer costs
Multiplier = Total cost ÷ Salary
Cost per hour = Total cost ÷ Working hours a year
Worked example
An employee earns 55,000 a year. The employer pays 10% of salary in taxes and3% as a retirement match, plus 4,800 for health insurance, 1,500for equipment and 800 for training. The rates are examples only:
- Taxes: 55,000 × 10% = 5,500
- Retirement match: 55,000 × 3% = 1,650
- Employer costs: 5,500 + 1,650 + 4,800 + 1,500 + 800 = 14,250
- Total cost: 55,000 + 14,250 = 69,250 a year, or 5,770.83 a month
- Multiplier: 69,250 ÷ 55,000 = 1.26
- Over 1,880 working hours: 36.84 an hour
Assumptions and limitations
- Every amount is rounded half up to the cent.
- Percentages apply to the full salary. Contribution caps and thresholds are not modelled.
- No employer tax or contribution rates are built in.
- This is an estimate for budgeting, not payroll or tax advice.
Frequently asked questions
What costs does an employer pay on top of the salary?
Typically employer payroll taxes or social contributions, retirement or pension contributions, health and other insurance, and benefits. There are also costs that come with the job, such as equipment, software, training and office space. Which ones apply, and at what rates, depends on the country and the employer.
Why are no employer tax rates built in?
They differ between countries and regions, depend on the salary and change from year to year. The calculator uses the rates you enter, from your payroll provider, accountant or tax authority, so the result matches your situation.
What is the cost multiplier?
The total cost divided by the salary. A multiplier of 1.26 means the employee costs 26% more than their salary. It is a quick way to compare roles or to budget for a new hire.
Which hours should I use for the hourly cost?
The hours the employee actually works in a year, after holidays and leave. Using paid hours instead gives a lower hourly figure. The Work Hours Calculator turns a weekly schedule and days off into yearly hours.
Should one-off costs like recruiting be included?
If you want the first-year cost, add them as a yearly amount. For a long-term average, spread them over the years you expect the employee to stay.