Calculate cost per employee from company wages, benefits, taxes, and employee count, or estimate loaded annual pay for one worker.

Use annual costs and a matching average headcount or FTE count. All costs are in US dollars.

Avoid counting costs already included in payroll twice. This is a planning estimate, not a payroll-tax or legal FTE determination.

Additional costs and hours

Blank means zero. Omit costs already included above.

Blank uses 2,080 (40 × 52) for the hourly equivalent.

Related Calculators

Cost Per Employee Formula

Company average mode divides included annual labor cost by a matching average headcount or FTE count:

Cost Per Employee = (Wages + Benefits + Taxes + Other) / Employees

Single employee mode adds a load factor and any extra annual costs to base pay:

Loaded Cost = Annual Pay × (1 + Load Percentage / 100) + Other Annual Costs
  • Wages — gross payroll before taxes and deductions.
  • Benefits — health insurance, retirement match, and other nonoverlapping benefit costs. Do not add paid leave again if it is already included in annual payroll.
  • Taxes — employer-paid payroll taxes (FICA, FUTA and SUTA); workers’ compensation is a separate insurance cost.
  • Other — equipment, software seats, training, recruiting, facilities allocation.
  • Annual Pay — salary, or hourly wage × hours/week × weeks/year.
  • Load % — benefits, taxes, and overhead expressed as a percent of pay.
  • Employees — headcount or full-time equivalents (FTEs).

Use FTEs if you have part-time staff. Two half-time workers count as one FTE. The hourly equivalent defaults to 2,080 hours/year for company and salaried estimates, with an optional annual-hours override; hourly-wage estimates use entered hours/week × paid weeks/year. This is not a legal FTE determination.

Reference Tables

Cost components vary by employer and accounting scope. Use actual employer records rather than universal load-factor ranges.

Cost Component Cost basis
Payroll taxes (FICA, FUTA, SUTA)Employer-specific
Health and other insuranceEmployer-specific
Retirement contributionsEmployer-specific
Paid leaveDo not double-count salary-paid leave
Total additional loadSum nonoverlapping costs

Illustrative loaded cost at an assumed 30% load factor and 2,080 hours/year; 30% is not a calculator default:

Base Pay Loaded Annual Cost Loaded Hourly
$40,000$52,000$25.00
$60,000$78,000$37.50
$80,000$104,000$50.00
$100,000$130,000$62.50
$150,000$195,000$93.75

Example and FAQ

Example: A 25-person team has $1,750,000 in annual payroll and $525,000 in benefits and taxes. Total cost is $2,275,000. Divide by 25 to get $91,000 cost per employee per year, or a $43.75 hourly equivalent using an assumed 2,080 hours/year per person.

Should I include the owner’s salary? Include it if the owner is paid through payroll and counts in headcount. Exclude profit distributions.

What about contractors? Track independent contractors separately when they are outside the employee-cost numerator and denominator. Contractor classification and applicable obligations depend on the facts; this calculator does not determine them.

Headcount or FTE? Use FTE when you have part-timers. Headcount and FTEs answer different questions: average cost per person versus per full-time equivalent. Match your numerator and denominator.

Why can load percentages differ? Benefit plans, payroll taxes, insurance, overhead scope and the pay denominator all affect the ratio. A percentage above 40% alone does not indicate an error.