Employee Cost Calculator
Total annual employer cost of an employee, and the cost per paid hour.
What this calculator does
Addition of the cost elements the employer enters, then division by the paid hours entered. No benefit rate, tax rate or working year is assumed.
Inputs and what they mean
- Currency
- — Amounts are shown in the currency you pick. No exchange rate is applied..
- Annual salary or wages
- — number value.
- Benefits paid by the employer
- — number value.
- Payroll taxes
- — number value.
- Insurance and statutory cover
- — number value.
- Equipment and software
- — Leave at 0 if you do not allocate it..
- Training and certification
- — Leave at 0 if you do not allocate it..
- Annual paid hours
- — Hours you pay for, including leave and holidays..
How to use it
- Enter your own figures — the calculator never fills in a rate, price or benchmark for you.
- Press Calculate to see the result.
- Read the formula, variables, assumptions and source below the result before you rely on it.
Formula
Total employer cost = Salary + Benefits + Payroll taxes + Insurance + Equipment + Training; Cost per paid hour = Total employer cost ÷ Annual paid hours
Worked example
Employee on $90,000 with benefits and payroll taxes
Every employer cost is entered; nothing is assumed.
Reading the result
The headline figure is the main answer. Any breakdown underneath shows the parts that make it up, so you can check the working and see what changes when you adjust an input.
Limitations and assumptions
Results depend entirely on the figures you enter and are rounded for display. They are for general information and education, not professional advice.
Reference: U.S. Bureau of Labor Statistics — Employer Costs for Employee Compensation — methodology
Last reviewed:
Common questions
Formula, source and verification
A sum of the employer-paid cost elements, divided by paid hours to give an hourly cost.
The question it answers: What does this employee cost us in total over a year, including everything we pay on top of salary?
The formula
Total employer cost = Salary + Benefits + Payroll taxes + Insurance + Equipment + Training; Cost per paid hour = Total employer cost ÷ Annual paid hours
- S — Annual salary or wages
- (currency). Gross pay before employer costs.
- B — Benefits
- (currency). Employer-paid benefits.
- T — Payroll taxes
- (currency). Employer payroll taxes.
- I — Insurance
- (currency). Statutory and voluntary cover paid by the employer.
- E — Equipment and software
- (currency). Allocated equipment cost; optional.
- R — Training
- (currency). Allocated training cost; optional.
- H — Annual paid hours
- (h). Hours paid for, including leave and holidays.
Units: Currency per year and per hour; hours.
What kind of calculation this is
Deterministic formula. The same inputs always give the same answer. The maths is fixed and does not depend on judgement.
Method
Addition of the cost elements the employer enters, then division by the paid hours entered. No benefit rate, tax rate or working year is assumed.
Assumptions built into the result
- Mathematical: All amounts cover the same twelve-month period.
Figures this calculator will never guess for you
- No benefit or payroll-tax percentage is inserted.
- No standard 2,080-hour year is imposed.
Limitations
- Covers cost only; it says nothing about the value or productivity of the role.
Source and version
- Standard or reference
- Total compensation cost (Wages plus employer-paid benefits as defined in the U.S. Bureau of Labor Statistics ECEC methodology.)
- Published source
- U.S. Bureau of Labor Statistics — ECEC methodology
- Formula version
- Version 1
- Verification
- Reviewed against the cited source on
- How much weight the source carries
- Standards or government
- Applies to
- Currency
- Amounts stay in the currency you choose; no exchange rate is applied.
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