True Cost of an Employee
Salary is only the start: see the fully loaded annual and hourly cost of a hire, including taxes, benefits, tools, space, and management time.
Example scenario—not a forecast or verified benchmark. Enable JavaScript to edit inputs, view charts, save locally and export your analysis.
Example inputs
- Base salary (annual)
- 60,000
- Bonus, commission, and overtime (annual)
- 3,000
- Employer payroll tax rate
- 8.5
- Workers' comp premium (% of pay)
- 1.5
- Health and other benefits (employer share, annual)
- 8,000
- Retirement match (% of pay)
- 3
- Equipment, software, and phone (annual)
- 2,400
- Office space, vehicle, or desk cost (annual)
- 4,800
- Recruiting and training (annualized)
- 1,500
- Manager time spent on this person
- 2
- Manager's loaded hourly cost
- 55
- Scheduled hours per week
- 40
- Paid vacation and sick days per year
- 15
- Paid holidays per year
- 8
Example results
This $60K employee really costs $93K a year (1.55x salary), or $49.11 per productive hour vs. a $28.85 base rate.
- Fully loaded annual cost
- $93,104
- Loaded cost per productive hour
- $49.11
- Cost multiplier on salary
- 1.55x
- Base hourly rate
- $28.85
- Cost beyond base salary
- $33,104
- Productive hours per year
- 1,896 hrs
- Loaded cost per month
- $7,759
What stands out
Every $1 of salary really costs $1.55
Costs beyond base salary add $33,104 a year (55% on top of pay). The largest add-on is benefits at $8,000.
23 paid days off cost $5,308 a year
Of 2080 paid hours, about 1896 are worked, which is why the loaded hourly cost ($49.11) is 1.7x the base rate ($28.85).
Management time adds $5,214 (5.6% of total)
2 hrs/week of a $55/hr manager is a real cost that rarely shows up in hiring budgets.
Next actions
- Use $49.11/hr, not $28.85/hr, when pricing work or judging whether this role pays for itself.
- Budget new hires at 1.55x salary so headcount plans don't understate cost by $33K per person.
- Cut management drag: written SOPs and a weekly 1:1 cadence can often halve the 2 hrs/week of manager time.
Model assumptions & limitations
- Employer payroll tax of 8.5% applied to all pay. FICA is 7.65%; the Social Security portion caps at an annual wage base, and unemployment taxes (FUTA/SUTA) usually apply only to the first several thousand dollars of wages and vary by state.
- Productive hours = 40 hrs/week x 52, minus 23 paid days off. Training days, meetings, and idle time are not deducted.
- Retirement match and workers' comp are applied to base plus bonus.
- Manager time is counted only in weeks the employee is working.