How it’s calculated
The calculator builds the true cost in four parts and sums them. The math is intentionally transparent so you can sanity-check every figure against your own payroll and benefits statements.
- Employer payroll taxes= salary × tax rate. The default rate of 7.65% reflects the employer share of FICA (6.2% Social Security + 1.45% Medicare). Federal and state unemployment taxes (FUTA/SUTA) can push this a point or two higher, so adjust the rate to match your state and wage base.
- Benefits= salary × benefits percentage. This bundles health insurance, retirement match, paid time off, and other perks. Roughly 20% of salary is a common small-business baseline, but it ranges widely by plan.
- Other overhead is a flat annual dollar amount for equipment, software licenses, and office or remote-work space attributable to the role.
- Total annual cost = salary + payroll taxes + benefits + overhead. The monthly cost is that total divided by 12, and the cost multiplier is the total divided by base salary — a quick way to see how much more than the headline number you actually spend.
Worked example. For a $60,000 salary at a 7.65% tax rate, 20% benefits, and $3,000 of overhead: payroll taxes are $4,590, benefits are $12,000, and the total annual cost is $79,590 — about $6,633 per month and a 1.33× multiplier on salary.
This tool is for planning and estimation only. Actual employer costs depend on your specific tax jurisdiction, benefit plan design, and accounting treatment — confirm figures with your payroll provider or accountant before budgeting.