Free tool
Cost of a new hire calculator
For small businesses about to hire. See what an employee really costs once employer payroll taxes and benefits are added to the wage. Tax year 2026.
Pay
State unemployment
Use the rate on your state's notice. 2.7% on $7,000 is only a placeholder.
Benefits and other costs
Varies widely by job and state.
Equipment, software, training.
Per year
Wages$55,000.00
Social Security (6.2%)$3,410.00
Medicare (1.45%)$797.50
FUTA$42.00
State unemployment$189.00
Payroll taxes (8.1%)$4,438.50
Total cost per year$59,438.50
Per month$4,953.21
Cost per $1 of wages1.08x
$3.99 a stub. See their take-home pay with the paycheck calculator.
FUTA assumes the full 5.4% state credit. Income tax is withheld from the employee and is not an employer cost.
Common questions
- How much does an employee cost on top of their salary?
- Employer payroll taxes alone add roughly 7.65% for Social Security and Medicare, plus federal and state unemployment tax on the first part of wages. Benefits such as health insurance and a retirement match usually add far more than the taxes.
- What state unemployment rate should I use?
- Your state assigns it. New employers usually get a standard new-employer rate for the first years, and the taxable wage base varies by state from $7,000 to over $70,000. Check the rate notice from your state workforce agency.
- Does this include income tax?
- No. Income tax is withheld from the employee and does not cost the employer anything. This shows only what the employer pays.