A salary is only part of what an employee costs. The employer pays its own half of Social Security and Medicare, federal unemployment tax on the first $7,000 of wages, state unemployment tax on the state wage base, any retirement match, and employer-paid benefits.
True cost of one employee
$73,902.00
On $60,000 of gross wages, employment costs 23.2% more than the salary.
| Item | Per employee | All employees |
|---|---|---|
| Gross wages | $60,000 | $60,000 |
| Social Security (6.2%) | $3,720.00 | $3,720.00 |
| Medicare (1.45%) | $870.00 | $870.00 |
| FUTA (0.6% on the first $7,000) | $42.00 | $42.00 |
| State unemployment (2.7% on $10,000) | $270.00 | $270.00 |
| Retirement match | $1,800.00 | $1,800.00 |
| Employer-paid benefits | $7,200.00 | $7,200.00 |
| Other employment costs | $0.00 | $0.00 |
| Total employment cost | $73,902.00 | $73,902.00 |
FUTA and state unemployment are charged per employee on their own wage bases, so the headcount changes the total even when the average wage does not.
| Tax | Employee pays | Employer pays | Combined |
|---|---|---|---|
| Social Security | $3,720.00 | $3,720.00 | $7,440.00 |
| Medicare | $870.00 | $870.00 | $1,740.00 |
| Total FICA | $4,590.00 | $4,590.00 | $9,180.00 |
The two halves together come to 15.3% of wages, all of it remitted by the employer. Additional Medicare tax has no employer match.
| Measure | Amount |
|---|---|
| Cost per employee, per year | $73,902.00 |
| Cost per employee, per month | $6,158.50 |
| Total payroll cost, per year | $73,902.00 |
| Total payroll cost, per month | $6,158.50 |
| Payroll taxes alone | $4,902.00 |
| Overhead above wages | $13,902.00 |
Planning usually starts from the monthly figure: this is the amount that has to be available each month before payroll runs.
This calculator adds all of it up: the cost of one employee, the cost of the whole team, what the two halves of FICA come to, and the monthly figure to budget for.
Social Security takes 6.2% from the employee and 6.2% from the employer, up to the annual wage base — $184,500 in 2026. Medicare takes 1.45% from each side with no cap. Together that is 15.3% of wages remitted by the employer, half of it withheld from the employee and half paid out of the business.
Wages above $200,000 (single) or $250,000 (joint) also attract the 0.9% Additional Medicare tax, which the employee pays with no employer match.
FUTA is charged on the first $7,000 of each employee's wages at a gross rate of 6%, but employers who pay their state unemployment tax in full and on time claim a credit of up to 5.4%, which brings the effective rate to 0.6% — $42 per employee per year at full credit.
State unemployment tax is set by each state from the employer experience rating: rates commonly run from under 1% for stable employers to more than 6% for those with high turnover, and each state has its own taxable wage base. Both are inputs here.
Retirement matches are usually a percentage of pay, so they rise with every raise. Employer-paid health, dental, life and disability premiums are often the largest single addition. Software seats, equipment, training and recruiting costs belong in the "other" line if you are budgeting a role properly.
One-off costs are excluded: recruiter fees, signing bonuses and relocation are not annual, but they matter when you compare hiring against contracting.
Each example below was run through the calculator on this page when the site was built, so the numbers match what you see when you enter the same inputs.
True cost of one employee
$73,902.00
On $60,000 of gross wages, employment costs 23.2% more than the salary.
Payroll tax alone adds about 7.7% to the wage; benefits and match push the loaded cost past 23%.
True cost of one employee
$57,292.50
On $45,000 of gross wages, employment costs 27.3% more than the salary — $286,463 in total.
Per-employee unemployment taxes are charged on each wage base separately, so headcount scales the total.
True cost of one employee
$272,576.00
On $250,000 of gross wages, employment costs 9% more than the salary.
Above $184,500 the 6.2% Social Security tax stops, so the effective payroll tax rate falls even as Medicare continues.
Payroll taxes add roughly 7.65% to 8% for most employees, plus whatever the employer pays for unemployment insurance, retirement match and benefits. In the US, a loaded cost 15% to 30% above salary is normal, and higher for generous benefit packages.
Both. Social Security and Medicare are split evenly, 6.2% and 1.45% each, for 15.3% in total. FUTA and state unemployment are employer-only. The employer withholds the employee half and remits the whole amount.
The gross rate is 6% on the first $7,000 of each employee’s wages, with a credit of up to 5.4% for state unemployment tax paid on time, giving an effective rate of 0.6% — $42 per employee per year if the full credit applies.
The maximum wage on which Social Security tax is charged: $184,500 for 2026. Medicare has no wage cap, and wages above $200,000 also attract the 0.9% Additional Medicare tax.
No. A properly classified independent contractor receives no FICA match, no FUTA, no state unemployment tax and no benefits, so the loaded cost is close to the invoice amount. Misclassifying an employee to avoid those costs is a common and expensive violation.
Yes. The employer share of payroll taxes, benefit costs and the retirement match are ordinary business expenses and generally deductible against business income, subject to the usual rules and limits.
Deposit frequency depends on the employer’s reported tax liability: monthly for smaller liabilities and semiweekly for larger ones, with next-day deposits required for very large amounts. Form 941 reports the tax quarterly and Form 940 reports FUTA annually.
Last reviewed 2026-09-14. This page is an estimate tool, not financial, tax or legal advice.Read the full disclaimer.