True Hourly Employee Cost Calculator
Calculate the real hourly cost of an employee including salary, benefits, taxes, and overhead expenses.
True Hourly Cost
True hourly employee cost includes far more than just salary. Most employers spend 1.25× to 1.4× the base salary when benefits and overhead are included.
True Hourly Cost = (Annual Salary + Benefits + Overhead) / Annual Work Hours
Typical benefit costs (% of salary):
- Health insurance: 7–14%
- Payroll taxes (FICA, FUTA, SUTA): 7.65–10%
- Retirement contributions: 3–6%
- PTO / holidays: 7–10%
- Workers comp / disability: 1–3%
Overhead per employee:
- Office space, utilities, equipment: $3,000–$10,000/year
- Software licenses and tools: $1,000–$5,000/year
- Training and development: $500–$2,000/year
Example: $60,000 salary + $15,000 benefits + $6,000 overhead = $81,000 total $81,000 / 2,080 hours = $38.94/hour true cost (vs $28.85 base)