Employee Cost Calculator
What a hire costs per year, per month, and per hour after payroll taxes, benefits, PTO, and overhead, with state unemployment pre-filled for every state.
2,080 = 40 hours × 52 weeks
Sets the SUI rate and wage base below. Both stay editable.
New-employer estimate; use your assigned rate
SUI applies only up to this amount
Health, retirement match, etc.
Vacation, sick, and holidays
Equipment, software, admin
$108,962
Annual employer cost
$9,080
Per month
$52.39
Per hour (2,080 hrs)
28.2%
Burden on salary
Cost breakdown
At $108,962 a year, a wrong hire is expensive. Skillora's AI screens and scores every resume against the role before you spend it.
Estimates only, using editable 2025 US defaults. Tax and insurance rates vary by employer, classification, and locality. Verify with a licensed accountant before relying on these figures.
A hire costs six figures. Screen before you spend it.
Skillora's AI screens and scores every resume against your role so the budget goes to candidates who fit.
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- Skill, experience, and fit scores
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An $85,000 salary costs the employer about $109,016 a year. The extra $24,016 is not optional: employer FICA, federal and state unemployment insurance, workers compensation, benefits, paid time off, and the equipment and software the person uses. This employee cost calculator adds each line to the salary and returns the annual, monthly, and hourly cost of the hire.
The tool applies the wage bases instead of a flat percentage. Social Security tax stops at $176,100 of wages, FUTA stops at $7,000, and state unemployment stops at each state's own wage base. That makes it more accurate than the hourly labor burden calculator for salaried staff, and it is the right tool for a hiring budget, a headcount plan, or a client conversation about what a direct hire costs against a contractor.
Pick a state to pre-fill its SUI rate and wage base, or open a state page from the list below for a worked example at $85,000 and a note on how that state compares.
How to calculate the true cost of an employee
- Start with gross annual salary. For an hourly worker, multiply the rate by 2,080 hours.
- Add employer FICA: 6.2% Social Security on wages up to the wage base and 1.45% Medicare on all wages. On $85,000 that is $6,503.
- Add FUTA at 0.6% of the first $7,000, which is $42 for anyone earning more than that.
- Add state unemployment: your assigned rate on wages up to the state wage base. New-employer rates run from 0.5% to over 4%, and wage bases from $7,000 to over $70,000.
- Add workers compensation as a percentage of payroll for the class code. Office roles sit below 1%; trades can exceed 6%.
- Add benefits: the employer share of health premiums, retirement match, life and disability cover. Eight percent of salary is a lean plan; fifteen percent or more is common at larger employers.
- Add paid time off as salary paid for hours not worked. Fifteen days is 120 hours, or 5.8% of a 2,080-hour year.
- Add overhead: laptop, software seats, desk, training, and the admin cost of running payroll. Five percent is a placeholder; replace it with your own figure.
Sum the lines and add them to salary. Divide by 12 for the monthly cost and by 2,080 for the hourly cost. The calculator does all of this as you type.
Worked example: $85,000 in Texas vs California
Same salary, same benefits, same PTO. The only input that changes is state unemployment: Texas at 2.7% on a $9,000 wage base, California at 3.4% on $7,000.
| Line | Texas | California |
|---|---|---|
| Base salary | $85,000 | $85,000 |
| Employer FICA (Social Security + Medicare) | $6,503 | $6,503 |
| Federal Unemployment (FUTA) | $42 | $42 |
| State Unemployment (SUI) | $243 | $238 |
| Workers' Compensation | $1,275 | $1,275 |
| Benefits (health, retirement) | $6,800 | $6,800 |
| Paid time off | $4,904 | $4,904 |
| Overhead (equipment, admin) | $4,250 | $4,250 |
| Total annual cost | $109,016 | $109,011 |
| Per month | $9,085 | $9,084 |
| Per hour (2,080 hours) | $52.41 | $52.41 |
The surprise is how small the state gap is at the new-employer defaults: $5 a year. Both states have low SUI wage bases, so the tax caps out in the first two months of the year and the rate difference never gets to bite. Employer FICA at $6,503 is the same in every state and dwarfs it.
The real California premium shows up elsewhere. Workers comp rates for the same class code run well above the national average in California, so a 1.5% default understates it for many employers. And the employee pays an estimated 6.0% state income tax, about $5,100 on this salary, where Texas takes nothing. That is the employee's cost, not the employer's, but it is why the same title commands a higher salary in California, and a higher salary raises every line above.
Employee cost by state
Each state page runs the $85,000 example with local state unemployment, explains how the state compares, and notes whether the employee pays state income tax.
Northeast
Midwest
South
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