Business

Employee Cost Calculator

The real cost of an employee is 1.25–1.4× their salary. Calculate the true fully-loaded cost including taxes, benefits, equipment, and office space.

Base Annual Salary ($)

Employer Payroll Taxes (%) FICA: 6.2% SS + 1.45% Medicare = 7.65% default

Health Insurance ($/month) Employer's monthly contribution toward premiums

401(k) Match (%) % of salary employer matches (common: 3–6%)

Paid Time Off (days/year) Vacation + sick days (reduces productive hours)

Equipment Budget ($/year) Laptop, monitor, peripherals amortized annually

Recruiting Cost (one-time, $) Job boards, agency fee, or interviewer time

Training Cost ($/year) Onboarding, courses, conferences

Office Space per Employee ($/month) Allocated desk/office cost. Enter 0 if fully remote.

Annual Fully-Loaded Cost

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Monthly Cost

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Cost Multiplier vs Salary

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Cost per Productive Hour

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Break-Even Revenue Needed

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What Does an Employee Actually Cost?

Most managers budget only the base salary. But the fully-loaded cost of an employee — everything the company actually pays — is consistently 1.25 to 1.4 times their annual salary, and often higher in expensive cities or for senior roles.

Payroll Taxes = Salary × 7.65% (FICA) + State unemployment (~2%)
Benefits = Health insurance + 401k match + dental/vision
Overhead = Equipment + training + recruiting + office space
Fully-Loaded Cost = Salary + Payroll Taxes + Benefits + Overhead
Cost Multiplier = Fully-Loaded Cost ÷ Base Salary
Productive Hours = (260 − PTO days) × 8 hours/day

Typical Cost Benchmarks

Small business (no benefits): ~1.10–1.15× salary (just FICA + minimal overhead)
Standard package: ~1.25–1.30× salary (FICA + health + 401k match)
Full enterprise package: ~1.35–1.45× salary (all benefits + generous PTO + professional development)
Senior engineering roles in SF/NYC: 1.5× or higher when office, equity, and perks are included

How much does an employee really cost vs their salary?

A $75,000 salary typically costs $93,750–$105,000+ all-in. Mandatory employer costs include: FICA payroll taxes (7.65%), federal/state unemployment insurance (~2%), and in some states additional payroll taxes. Then add benefits: health insurance (employers average $7,000–$9,000/year per employee), 401k match (3–6% of salary), dental/vision, and paid time off. Finally, one-time costs like recruiting (20–30% of salary if using a recruiter) and equipment ($2,000–$5,000) must be amortized. Most CFOs use 1.3× as their planning assumption.

What is the true cost of a $60,000 employee?

A $60K employee costs approximately $76,000–$84,000 per year fully loaded. Here's the math: $60K salary + $4,590 FICA + $7,200 health insurance (employer portion) + $2,400 401k match (4%) + $600/mo office space ($7,200/yr) + $2,500 equipment + $1,500 training + $4,000 recruiting amortized = roughly $89,000 in year one, dropping to ~$82,000 ongoing. The break-even revenue contribution this employee needs to generate — assuming a 30% gross margin target — is roughly $280,000/year.