Free Business Tool

Employee Payroll Cost Calculator

Estimate the total cost of hiring and employing an employee, including wages, employer payroll taxes, benefits, insurance, and other employer-paid costs.

Free educational calculator • No signup required • Calculator inputs stay in your browser

Employee Cost Details

Employee Compensation

Tax Year

Pay Type

Annual Salary

Enter the employee's expected gross annual wages before payroll deductions.

Employer Payroll Taxes

Wages Already Paid to This Employee This Year

Enter wages already paid to this employee during the selected calendar year. This helps estimate remaining Social Security tax when wages approach the annual wage base.

Employer FUTA Effective Tax Rate

The standard FUTA rate is generally 6.0% before potential state unemployment tax credits. Many employers may use an effective rate of 0.6%, but actual rates can differ.

State Unemployment Tax Rate

Enter your estimated employer state unemployment tax rate. State rates vary by employer, industry, claims history, and state law.

State Unemployment Taxable Wage Base

Enter the annual wage amount subject to your state unemployment tax. If you do not know it, leave this at $0 and the calculator will exclude estimated state unemployment tax.

Benefits and Other Employer Costs

Employer-Paid Health Insurance Per Year

Employer Retirement Contribution Per Year

Workers' Compensation Cost Per Year

Employer-Paid Paid Time Off Cost Per Year

Enter an estimated annual cost for vacation, paid holidays, sick leave, or other paid time off if not already included in the annual salary estimate.

Payroll Provider and HR Software Cost Per Year

Other Annual Employer Costs

Examples may include training, uniforms, recruiting, equipment, bonuses, parking, phone, or other employee-related costs.

For general educational use only. Do not enter employee names, Social Security numbers, bank information, payroll records, tax forms, or other sensitive information.

Your Estimated Employer Cost

Enter the compensation and cost details, then select Calculate Employer Cost. Results appear here and stay in your browser.

What Is Included in an Employee's Total Cost?

An employee's total cost can include more than wages. Businesses may also pay employer payroll taxes, unemployment taxes, health insurance, retirement contributions, workers' compensation, paid time off, payroll software, training, equipment, and other benefits.

Example: An employee earning $60,000 may cost more than $60,000 after employer payroll taxes, benefits, insurance, paid time off, and payroll administration are included.

This calculator does not determine whether a worker is properly classified as an employee or independent contractor.

What Payroll Taxes Does an Employer Usually Pay?(show)

Employers generally pay their share of Social Security and Medicare taxes on employee wages. Employers may also pay federal unemployment tax and state unemployment tax. Actual payroll obligations vary based on worker classification, state law, industry, employee wages, benefits, and other facts.

Official Sources

Federal tax settings last reviewed: August 11, 2026.

Need Help With Payroll, Hiring, or Labor-Cost Planning?

HW & Associates CPA PLLC can help businesses with payroll setup, payroll processing, worker classification support, bookkeeping, tax planning, and CFO advisory services.

Schedule a Payroll or Tax Planning Consultation

Educational use only. This calculator provides a simplified, general estimate of potential employee payroll and employer costs based solely on the information entered by the user and the selected tax-year settings. It is not payroll, tax, legal, accounting, financial, human-resources, employment-law, or benefits advice. It does not prepare payroll, calculate tax deposits, file payroll tax returns, determine tax liability, determine employee eligibility, or guarantee compliance with federal, state, local, or other requirements.

Actual employer costs may differ because of state and local payroll taxes, unemployment-tax experience rates, FUTA credit reductions, wage limits, workers' compensation rates, benefits, overtime, bonuses, commissions, paid leave, industry rules, employee classification, payroll timing, local ordinances, and other factors. Consult a qualified payroll, tax, legal, or human-resources professional before making hiring, compensation, classification, benefits, or payroll decisions.

Use of this calculator or website does not create a CPA-client, accountant-client, attorney-client, fiduciary, employment, payroll, or other professional relationship with HW & Associates CPA PLLC. A professional relationship begins only when HW & Associates CPA PLLC accepts an engagement and the parties execute an applicable engagement agreement.

Do not enter employee names, Social Security numbers, employer identification numbers, bank-account details, payment-card information, payroll reports, tax forms, or other sensitive information. Calculator inputs and results are processed locally in the visitor's browser and are not intentionally saved or transmitted by this calculator.