United States · 2026 calculator

US Employee Cost Calculator

Estimate the true annual cost of an employee beyond base salary, including payroll taxes and benefits.

YOUR DETAILS

Enter your assumptions

Enter your state's wage base and your assigned employer rate for the tax year. For example, Texas uses $9,000 of annual wages per employee in 2026. Workers' compensation inputs should come from your insurer's quote; use modifier 1 when no experience adjustment applies.

What this calculator explains

Salary is only one part of an employer’s hiring budget. The total can also include the employer share of Social Security and Medicare, federal and state unemployment taxes, workers’ compensation, health benefits, retirement contributions, paid leave, equipment, recruiting and operating overhead.

The result separates statutory payroll costs, configurable benefits and internal overhead. This lets an employer compare a minimum cash-cost estimate with a broader workforce-cost scenario instead of relying on one universal markup.

How the estimate is calculated

  1. Add annual salary and bonus to determine cash wages.
  2. Calculate employer Social Security and Medicare using current federal limits.
  3. Estimate FUTA with the full state credit, then apply the entered employer SUTA rate to wages capped at the entered state annual wage base.
  4. Calculate workers’ compensation as covered annual payroll divided by $100, multiplied by the insurer classification rate and experience modifier. Add retirement contributions on base salary and entered annual benefits.
  5. Add optional recruiting, equipment and overhead costs.
  6. Show annual and monthly cost and the amount above cash compensation.

Formula

Total employee cost = salary + bonus + employer payroll taxes + unemployment taxes + workers’ compensation + health benefits + retirement + other benefits + recruiting and overhead

Worked example

For an $80,000 salary, employer Social Security is $4,960 and standard employer Medicare is $1,160 before any special rules. If full FUTA credit produces $42, state unemployment is entered as $1,200, benefits are $12,000, workers’ compensation is $800 and retirement is $3,200, the illustrative recurring cost is $103,362 before recruiting or equipment. State-specific results will vary.

Rules and assumptions

  • For 2026, the employer Social Security rate is 6.2% on covered wages up to $184,500; employer Medicare is modeled separately.
  • The federal FUTA rate is 6.0% on the first $7,000 of applicable wages before any allowable state unemployment credit.
  • State unemployment, workers’ compensation and benefit costs must remain editable because they vary by location, industry and employer.

Included in the estimate

  • Employer Social Security and Medicare
  • Federal unemployment with full credit and state unemployment using entered rate and wage base
  • Health, retirement and other benefits
  • Workers’ compensation entered by the user
  • Bonus, recruiting, equipment and overhead inputs
  • Total annual and monthly cost

Not included or not guaranteed

  • A payroll filing or workers’ compensation quote
  • Every state and local payroll assessment
  • Industry-specific collective bargaining obligations
  • Misclassification or employment-law analysis
  • Productivity or revenue generated by the employee

How much more than salary does an employee cost?

There is no universal percentage. The difference depends on wage level, state, unemployment rates, insurance, benefits, leave and employer policies.

Does the calculator include health insurance?

Yes, as a user-entered annual employer contribution. No national average is assumed unless a visible source and date are provided.

What payroll should I use for workers’ compensation?

Use the covered payroll specified by your insurer. Blank payroll uses salary plus bonus. Enter a different amount when classification rules exclude part of that pay; fixed policy fees and other rating adjustments are not included.

Does FUTA always equal 0.6%?

The gross FUTA rate is higher, and a credit can reduce it when conditions are met. Credit-reduction states or late state payments can change the effective amount.

Can I compare an employee with a contractor?

The page can compare entered cost assumptions, but it does not decide worker classification. Classification depends on the facts and applicable law.

Does Employment Allowance exist in the US?

No. Employment Allowance is a UK concept. US employer costs use federal, state and sometimes local payroll rules.

Official sources

Applicable period: 2026 · Last reviewed: September 3, 2026

Related tools

Build a defensible hiring budget

Review the separate tax, insurance, benefits and overhead amounts with your insurer and payroll provider.