04 Evaluate hiring
Employee cost calculator
Enter the pay and the costs you expect on top of it. See the yearly and monthly cost of the role before you make an offer.
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It runs in your browser, and JavaScript is turned off or blocked here. Turn it on to use the calculator, or work it out by hand with the formula and worked example below.
Your result
Enter the pay, then any employer costs you want to include.
You will see
- Total yearly and monthly cost of the role
- How each cost adds up
- What is not included
Your figures stay in this browser tab. Nothing is saved or sent.
What to enter
- Annual salary or hourly rate
- Gross pay before anything is withheld. For hourly pay, also enter the paid hours per week and paid weeks per year, counting paid time off.
- Employer taxes and burden
- Your share of payroll taxes and other costs charged as a percentage of wages, such as unemployment insurance and workers' compensation. Rates depend on your location, industry and history, so use the rates on your own payroll records, tax notices or quotes. Leave it blank to leave them out.
- Benefits per month
- What the business pays each month toward this person's benefits, such as health insurance premiums or retirement contributions.
- Other monthly costs
- Recurring costs tied to the role, such as software seats, a phone, equipment leases or a training budget.
How it is calculated
- Annual wages
- Salary, or Hourly rate × Paid hours per week × Paid weeks per year
- Employer taxes and burden
- Annual wages × the percentage you enter
- Benefits and other costs
- Monthly amounts × 12
- Total annual cost
- Wages + Taxes and burden + Benefits + Other costs
- Monthly cost
- Total annual cost ÷ 12
Not included unless you add them: recruiting and onboarding, overtime, bonuses and commissions, raises, one-time equipment, and any tax, insurance or benefit cost you leave blank.
Taxes withheld from the employee's pay are part of their wages, not an extra cost to you.
This calculator does not fill in tax rates, decide which taxes apply to you, or decide whether someone should be an employee or a contractor.
Worked example
A full-time hourly role at $22.00 an hour, 40 hours a week, 52 paid weeks a year. The owner's figures: 10% in employer taxes and burden, $450.00 a month in benefits and $120.00 a month in other costs. These are example figures, not typical rates.
- Annual wages
- $22.00 × 40 × 52 = $45,760.00
- Employer taxes and burden
- $45,760.00 × 10% = $4,576.00
- Benefits and other costs
- ($450.00 + $120.00) × 12 = $6,840.00
- Total annual cost
- $57,176.00
The role costs about $4,764.67 a month, or $27.49 for each paid hour, compared with $22.00 an hour in wages.
Common questions
Which employer taxes should I include?
That depends on where the employee works and on your business. Check your payroll reports, tax notices or insurance quotes for your actual rates and enter their total as a percentage of wages. The calculator does not fill in rates for you.
Why is the total higher than the salary?
Wages are only part of what a role costs. Employer taxes, benefits and the tools the person needs all come on top, and the calculator adds each one you enter.
How do I fit this into my cash flow?
Add the monthly cost to cash paid out in the cash flow planner, starting the month the person begins.
Plan the hire with our team.
Go Big Accounting's accounting and tax services include payroll liaison and budgeting for small businesses.