Employee Cost Calculator

Base salary, employer payroll taxes (FICA, FUTA, SUTA), health insurance, 401(k) match, benefits, equipment, office space, and training overhead to produce a fully loaded employee cost.

Optimize headcount and benefits...

The true cost of an employee is typically 1.25-1.4x their base salary according to SHRM 2025 data. This includes employer payroll taxes (FICA 7.65% plus FUTA and SUTA), health insurance (8-12%), 401(k) match (3-5%), benefits, equipment, office space, and training. A $50,000 salary typically costs the business $62,500-70,000.

Small businesses should keep total employee costs below 40-50% of revenue for service businesses and 20-30% for product businesses. Professional services firms typically run at 55-65% with healthy margins. If labor costs exceed 60% of revenue, profitability becomes very difficult.

Three approaches: negotiate better rates on benefits and insurance through group schemes, reduce office costs with hybrid work policies (saves $3,000-5,000 per employee per year), and invest in automation to increase output per employee rather than adding headcount.

Review total employee costs quarterly and update fully loaded cost calculations annually during budgeting. Track cost-per-employee trends over time to identify creeping expenses. Review individual role economics when making hiring decisions or setting billing rates.

Fully loaded employee cost includes every expense associated with employing someone: salary, taxes, benefits, equipment, training, management overhead, and workspace. It matters because underestimating true costs leads to underpricing services, unprofitable hiring, and inaccurate project budgets.

Divide net profit by number of employees...

Assess needs, budget, and timelines...

Multiply hourly rate by hours worked per year...

30-45 days is average.

Mission/values, code of conduct, leave policies, grievance procedure, disciplinary process, H&S, and data protection.