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.

Download the Excel Spreadsheet version (cost: $29.95)

if you want to include more information, such as bonuses, retirement benefits or overhead expenses, need to enter more kinds of payroll taxes, or want to save your information.

Using the free online calculator:

Use the online calculator below to calculate basic employee costs, including health insurance, workers compensation insurance and payroll taxes. The form has been updated to reflect 2020 taxes and wage base changes.

February, 2013: The calculator now provides separate lines for Social Security and Medicare, allowing more accurate calculations for employees making more than the Social Security Wage Base.

Green fields are required. Cream ones are optional. The information you enter will not be sent anywhere (I’ll never see it), but it may remain in your browser cache.

The online version of the employee cost calculator has three sections:

  • Basic wage and hours information
  • Optional benefits, including paid time off and health and dental insurance
  • Required benefits, including payroll taxes and worker’s compensation insurance

Each section must be completed before going to the next, but you can go back if necessary. Once done, you can view or print the results along with a summary that includes information about the real hourly cost of the employee.

 Exempt from Minimum Wage Laws?

For salaried employees, enter annual wages here to compute an hourly rate.

 Get Hourly Rate 
 Enter Optional Benefits 
The Excel Version of the Employee Cost Calculator (cost: $29.95) allows you to add bonuses and taxable benefits in addition to wages.

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 this form. If you notice errors or missing data entry fields commonly relevant to Massachusetts employment, please use the contact form to send feedback.

Get the Excel version of the Employee Cost Calculator (cost: $29.95)

The Excel spreadsheet calculator includes several more options than the 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 expenses for up to eight payroll taxes or other required benefits (pensions, etc.).
  • Calculate an employee’s fringe benefits percentage, overhead percentage and wage multiplier, as well as the total cost to the company and real hourly rate.
  • Save a copy of the spreadsheet for each employee.

A download link is emailed as soon as your payment clears at PayPal, so you can start using the spreadsheet right away.