Employee Real Cost Excel Calculator
What's an employee REALLY cost? How do you compare a subcontractor’s rate to the hourly rate you pay an employee? What does providing health insurance really add to the bottom line, considering payroll taxes are reduced by pretax deductions? How much does an employee add to your worker’s compensation insurance? You can use this calculator to find out.
If you were looking for the free online employee cost calculator, click here.
What can you do with the employee cost calculator spreadsheet?
- Show an employee the value of their compensation package.
- Use when negotiating a pay increase.
- Compare total employee costs (not just the hourly rate) to subcontractor rates.
- Calculate the minimum billing rate for an employee’s time.
- Budget employee costs more accurately.
- ‘Test-drive’ various scenarios before committing to a new hire or changing your benefits package.
Purchase and download the Excel Employee Cost Calculator
Why not use the free online version?
The Excel calculator includes several more options than the online version. If you don't need them, stick with the free online version.
- Include bonuses and taxable benefits in addition to wages.
- Include retirement and other pre-tax benefits in addition to health and dental insurance.
- Include indirect or overhead expenses.
- Calculate an employee’s fringe benefits as well as the total cost to the company.
- Save a copy of the spreadsheet for each employee.
Available in .xls format, compatible with Excel for Mac (97-2004) and Windows (97-2003) or higher, or in .xlsx format for Mac (Excel 2008 or higher) or Windows (Excel 2007 or higher), the spreadsheet is designed to be easy to use. Minimum required information and optional values are color-coded and the rest of the sheet is locked to allow easy tabbing through the form and prevent over-writing the calculations. It includes help text and data validation to reduce errors, and a setting to hide cell borders, color coding and extra text before printing.
How to purchase and download the employee cost calculator:
- Select your version (.xls or .xlsx) and click the Paypal "Buy Now" button.
- You will be taken to the Paypal site, where you can pay with a credit card or Paypal account. If your credit card or Paypal account has a Massachusetts address, sales tax will be added to the purchase price.
- Once you complete your order at Paypal and your payment clears, a download link will be sent to the email address you used at Paypal. If you pay with a credit card or existing funds in a Paypal account, this should happen within a few minutes to a few hours, depending on how busy the Paypal site is. If you pay with an echeck, it may take several days for the funds to clear.
- Please wait for the email; do NOT use the "Buy Now" button a second time or you may be charged again. If you think the email should have arrived, check your spam or junkmail box.
- Download your file using the provided link (it should save to your default download location). Note that the download link expires 24 hours after the email is sent.
- Go to the downloaded file and unzip it (most users will just need to double-click the file). It should now be ready to use.
Refunds/Returns: No refunds or returns. If you are unable to download the file or you receive a corrupted file, I will happily send you a replacement. If you don't like the tool or discover an error, please provide feedback using the contact form on this site. If you suggest something I think would be useful for the majority of users, I may incorporate it into a new version and send you an updated copy. However, I will not refund your original purchase price.
DISCLAIMER: Jo Landers does not guarantee the accuracy of this calculator. I hope you find it useful; however your actual employee costs may be different from those generated by the calculator.
Requirements:
Any Mac or Windows version of Excel (97 or later) capable of opening .xls or .xlsx files.
Ability to unzip a .zip archive (if your computer won't do this, there are free programs that will).
Does not use macros or require VB support (good news for Mac Office 2008 users!).
Detailed Instructions:
The calculator includes explanatory text on the sheet and when individual fields are entered, and uses data validation to reduce errors. Input cells are color-coded to make data entry easier, and calculation cells are locked to prevent accidental changes. All help text, color coding and box borders can be hidden before printing.
Hourly Rate
If the employee is on salary, you can use the built-in salary to hourly converter to get an hourly rate.
- Enter the employee's hourly rate and average hours per week.
- Enter the number of hours per week your business considers full-time.
Annual Wages
The calculator will compute working and non-working hours, show percentages and costs for each, and add any additional income to wages.
- Enter information about paid time off, including paid breaks, vacation, holidays, sick time, etc.
- Enter information about paid non-working time, including paid training, travel or on-call time.
- Enter taxable compensation the employee receives in addition to wages, such as bonuses, use of company car, or excess childcare reimbursements.
Optional Benefits
The calculator will show the company and employee cost for each benefit, and calculate pre-tax wages for payroll taxes.
- Enter the monthly cost and company contribution to health and dental insurance.
- Enter the monthly payment you receive from the Insurance Partnership (Massachusetts only; or use if your state has a similar program) for the employee (IP payments reduce an employee's pre-tax deductions, increasing your cost for payroll taxes).
- Enter the dollar amount or percent of wages the employee contributes to a retirement plan.
- Enter the dollar amount, percent of wages or company match the company pays into a retirement plan.
Required Benefits
The calculator will compute and show the company cost for each required benefit.
- FICA and FUTA are calculated using the employee's pre-tax wages. The percentages and wage bases can be edited if they change.
- State UI is calculated using the employee's pre-tax wages, based on the percentage and wage base you enter (if you don't know your State UI rate or wage base, contact your state unemployment agency).
- Worker's compensation is calculated using the employee's total wages and rate you enter (if you don't know the rate for this employee, check your policy or ask your insurance agent). You can override the wages used for calculating worker's compensation insurance if the employee is subject to a minimum or maximum wage amount (for example, a company officer).
- The calculator allows you to add one extra required benefit. Depending on your location, you may have an additional tax, or be required by an employee or union contract to pay additional amounts.
Indirect Expenses
The calculator allows you to enter up to three line items for indirect expenses, such as the cost of office space, tools or equipment. This is used when calculating the employee's total real cost.
Summary
The summary section provides the following information:
- Annual wages for work - the cost for all working time, excluding paid time off or paid non-working hours.
- Optional Benefits - total and cost for paid time off, health and dental insurance, retirement, and other benefits.
- Required Benefits - total and cost for each required benefit or payroll tax
- Other Expenses - total and cost for paid non-working time, other included in wages (such as bonuses), and indirect expenses.
- Total annual cost for the employee, with all expenses included. Use for budgeting and planning.
- Fringe benefits cost and percentage, and hourly rate after fringe benefits have been included. Use for showing an employee what the total value of their compensation is.
- Other expenses cost and percentage.
- A wage multiplier and real hourly cost after all expenses are included. Use for calculating a minimum rate (before profit) if billing the employee's time to others.
Custom versions of the employee cost calculator:
If you need a customized version with specific calculations for your business or state, additional fields or advanced features (such as adding multiple employees and creating a summary report) send me details and I'll quote a price for you. Note that the minimum charge would be one hour at $50.00/hour; more if you didn't send me the specific requirements for your state or local taxes and I researched them myself.
