Employee Cost Calculator
Salary is the start. Add employer taxes, benefits and the cost of a seat, and see the real number, including what each hour of work costs.
- Base pay$70,00079%
- Taxes and insurance$5,9367%
- Benefits$9,90011%
- Equipment and overhead$3,0003%
The meeting cost calculator assumes 1.3 times salary as a rule of thumb. On these numbers, yours is 1.27.
| Cost | A year | Of pay |
|---|---|---|
| Base pay | $70,000 | 100% |
| Taxes and insurance | ||
| Social Security6.2% of the first $184,500 | $4,340 | 6.2% |
| Medicare1.45% of all pay | $1,015 | 1.5% |
| Federal unemployment (FUTA)On the first $7,000 | $42 | 0.1% |
| State unemployment (SUTA) | $189 | 0.3% |
| Workers' compensation | $350 | 0.5% |
| Benefits | ||
| Health insurance | $7,200 | 10.3% |
| Retirement match | $2,100 | 3.0% |
| Other benefits | $600 | 0.9% |
| Equipment and overhead | ||
| Equipment and software | $2,500 | 3.6% |
| Training | $500 | 0.7% |
| Office space | $0 | 0.0% |
| Total | $88,836 | 127% |
Estimates for planning, using 2026 federal figures. State taxes, local payroll taxes and your own benefit costs vary, so replace the defaults with yours. Nothing here leaves your browser.
You know what an hour costs. Now see where the hours go.
Once an hour of a teammate's time has a price, a two hour status meeting looks different. PomoTodo shows where focused time actually lands, project by project, so the expensive hours go to the work that needs them.
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You are about to make a hire, or price a contract, or explain to someone why a $70,000 role does not cost $70,000. The offer letter shows one number. The company pays several more.
Put in the pay and this adds the rest: the employer's half of Social Security and Medicare at 2026 rates, federal and state unemployment tax, workers' compensation, health cover, a retirement match, and the laptop, software and training that come with the seat. You get a yearly total, the multiplier over pay, and the cost of each hour actually worked once paid time off is taken out.
That last figure is the useful one. It is what an hour of this person's time really costs, which is the number to hold up against a contractor's rate or against what the work is worth.
What an employer pays on top of salary in 2026
Social Security: 6.2% of each employee's wages up to $184,500, so at most $11,439 per person for the year.
Medicare: 1.45% of all wages, with no cap. The extra 0.9% that applies to high earners is the employee's alone.
Federal unemployment (FUTA): 6.0% on the first $7,000 of wages, less a credit of up to 5.4% for state unemployment tax paid on time. In most states that leaves 0.6%, or $42 per employee. States that have borrowed from the federal fund get a smaller credit and pay more.
State unemployment (SUTA): a rate your state assigns, based largely on your history of former employees claiming benefits, charged on a wage base that also varies by state. New employers get a standard starting rate.
Workers' compensation: insurance required in almost every state, priced by the kind of work. Desk jobs are cheap to cover; physical work costs far more.
Comparing an employee with a contractor
Line up the cost per hour worked from this page against a contractor's hourly rate, and the gap is usually smaller than it first looks. A contractor pays their own taxes, equipment and benefits, and is not paid for holidays, which is exactly what the employee figure here has absorbed. If you are the contractor, the freelance rate calculator works the same comparison from the other side.
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Questions
How much does an employee cost on top of salary?
A common rule of thumb is 1.25 to 1.4 times salary once employer taxes, benefits and equipment are counted, but the spread is wide. Generous health cover or a high state unemployment rate pushes it up, and a lean company with few benefits sits near the bottom. The calculator replaces the rule of thumb with your own figure.
What payroll taxes does an employer pay in 2026?
The employer's half of FICA: 6.2% Social Security on wages up to $184,500 and 1.45% Medicare on all wages. Then federal unemployment tax, usually 0.6% on the first $7,000, and state unemployment tax at a rate and wage base set by your state. Employees pay their own matching 7.65%, which is withheld from their pay and is not an extra cost to you.
Does the employer pay the additional 0.9% Medicare tax?
No. The additional Medicare tax on wages over $200,000 is paid by the employee only. Employers withhold it but do not match it, so it does not add to the cost of a hire.
How is the cost per hour worked calculated?
The yearly total divided by the hours the person is actually available to work: 52 weeks of scheduled hours, minus paid days off and holidays. With the example figures, $88,836 over 1,896 working hours is about $46.85 an hour, noticeably more than the $42.71 you get by dividing by all 2,080 paid hours.
Is it cheaper to hire a contractor?
Sometimes. A contractor's rate has to cover their own taxes, benefits and the gaps between clients, so it looks high next to a salary but may not look high next to this page's cost per hour worked. Compare the two hourly figures, then weigh what money does not capture, like control over how the work is done and the legal line between the two.