True Employment Cost Calculator

Why calculate true employment cost? An employee's salary is only part of their total employment cost. Benefits, taxes, overhead, and other expenses can add 25-50% or more to the base salary amount.

Key components of employment costs:

• Compensation: Base salary, overtime, bonuses, commissions, and other direct payments to the employee.
• Benefits: Health insurance, retirement plans, paid time off, and other perks that have a quantifiable cost.
• Taxes: Employer-paid payroll taxes including Social Security, Medicare, unemployment insurance, and workers' compensation.
• Overhead: Costs to equip, train, and provide workspace for the employee, including technology, professional development, and office space.

How to use this information:

• Budget more accurately for hiring by accounting for all costs
• Calculate the true ROI of employees by comparing their total cost to their contribution
• Make informed decisions about employee benefits packages
• Determine accurate billing rates for service-based businesses
• Evaluate alternatives like contractors or outsourcing based on true cost comparisons
• Identify areas where employment costs could be optimized

Note: This calculator provides estimates based on the information you provide. For precise calculations specific to your business situation, consult with your accountant or financial advisor.