Payroll & wages
Employee cost calculator
Use this employee cost calculator to find the true cost of an employee beyond base wages: add mandatory employer FICA (Social Security + Medicare) and an optional benefits % for health, 401(k), or overhead. See monthly, annual, and hourly employer cost — not take-home pay.
How to calculate employee cost (3 steps)
Enter gross pay
Annual salary or hourly wage + hours/week — try the $60,000 preset or enter your own numbers.
Review employer FICA
Default 2026 employer Social Security (6.2% up to the wage base) and Medicare (1.45%) rates apply; add optional benefits % for non-FICA overhead.
Read totals & export
Monthly and annual employer cost plus burden %. CSV or PDF after email opt-in.
What employer cost includes (US payroll taxes)
For most US employers, mandatory employer FICA adds about 7.65% on wages (6.2% Social Security on wages up to the annual wage base, plus 1.45% Medicare with no cap). That is the baseline labor burden rate this calculator models. Health insurance, 401(k) match, state unemployment (SUTA), and workers' comp vary by state and plan — use the benefits % field for a rough add-on.
German SV rules: Arbeitgeberkosten-Rechner (hreflang pair). Salary ↔ hourly: hourly wage calculator; take-home pay: paycheck calculator.
| Tax | Employer rate (2026) | Notes |
|---|---|---|
| Social Security | 6.2% | On wages up to annual wage base |
| Medicare | 1.45% | No wage cap for employer |
| Combined FICA | 7.65% | Typical burden below SS cap |
Example: $60,000 annual salary
On $60,000 gross annual pay, employer FICA is about $4,590/year — total employer cost $64,590 before benefits (~7.65% burden). Monthly employer cost: about $5,382.50.
Example: $20/hour employee cost
At $20/hour, 40 hours/week, 52 weeks/year ($41,600 gross), employer FICA adds about $3,182/year. Total employer cost ≈ $44,782/year or $3,732/month — roughly $21.53/hour true employer cost before benefits.
What this calculator does not include
State unemployment insurance (SUTA), workers' compensation, local payroll taxes, and federal/state income tax withholding are not modeled in v1. Use the optional benefits % field for health, retirement match, PTO accrual, or other overhead — or pair with our paycheck calculator for employee take-home.
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Frequently asked questions about employee cost calculator
How do I calculate the true cost of an employee?
Add gross wages to employer payroll taxes (FICA) and any benefits you provide. This calculator starts with FICA; use the benefits % field for health, retirement, or PTO overhead.
What is employer FICA in 2026?
Employers pay 6.2% Social Security on wages up to the annual wage base and 1.45% Medicare on all covered wages — typically 7.65% combined on wages below the SS cap.
Is this a paycheck or take-home calculator?
No. This tool estimates employer cost, not employee net pay. For take-home after withholding, use the paycheck calculator.
How much does an employee cost an employer?
Add gross wages to employer FICA (typically 7.65% below the Social Security wage base) plus any benefits you provide. Example: $60,000 salary → about $64,590 total annual employer cost before optional benefits.
How much does a $20/hour employee cost an employer?
At $20/hour full-time (40h × 52 weeks), gross pay is $41,600/year. Employer FICA adds about $3,182 — total cost ≈ $44,782/year (~$21.53/hour employer cost) before benefits.
What is the formula for employee cost?
Total employer cost = gross wages + employer Social Security + employer Medicare + optional benefits. Below the SS wage base, FICA is about 7.65% of gross. Use the calculator for monthly, annual, and hourly outputs.
What payroll costs does an employer pay?
Federal employer FICA (Social Security and Medicare) is mandatory on W-2 wages. Many employers also pay SUTA, workers' comp, and benefits — modeled here only via the optional benefits % field in v1.
Is this calculator legally binding?
No. Results use 2026 FICA defaults for planning. Actual payroll depends on wage base limits, filing status, state rules, and benefits — consult your payroll provider or tax advisor for compliance.