Salary is only part of what an employee costs. This calculator adds the employer side properly — Social Security taxed only up to the SSA wage base, FUTA and SUTA only on the first $7,000, Medicare on every dollar — plus workers’ comp and benefits, so you get the real total, the cost multiplier and the true hourly cost. Pick your country preset, then edit any rate: every figure is an editable assumption, not a black box.
True hourly cost = total employer cost ÷ 2,080 hours (40 hrs × 52 weeks) — the honest rate to compare against a contractor’s hourly quote. The multiplier = total cost ÷ salary: 1.19× means every $1 of salary really costs about $1.19.
Capped taxes state the wage base they were charged on, so a high salary never quietly over-taxes Social Security, FUTA or SUTA.
| Component | How it is charged | Cost / year | Share of total |
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The true cost of an employee beyond salary: employer payroll taxes on the correct wage bases, workers’ comp and benefits — total cost, multiplier, monthly cost and true hourly cost.
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Find what an employee really costs beyond the salary: US employer payroll taxes modelled on the correct wage bases — Social Security only up to the SSA wage base, FUTA and SUTA only on the first $7,000, Medicare uncapped — plus workers’ comp and benefits, with UK and generic presets, the cost multiplier and the true hourly cost.
An $80,000 salary in the US preset: Social Security 6.2% × $80,000 = $4,960 (the salary is under the 2026 wage base of $184,500, so it is charged in full); Medicare 1.45% × $80,000 = $1,160; FUTA 0.6% × the first $7,000 only = $42; SUTA 2.7% × the first $7,000 only = $189; workers’ comp 1% = $800; health insurance $6,000; retirement match 3% = $2,400. On-costs total $15,551, so the true employer cost is $95,551 a year — a multiplier of 1.1944×, $7,962.58 a month, and a true hourly cost of $95,551 ÷ 2,080 = $45.94. At a $200,000 salary the caps bite: Social Security stops at 6.2% × $184,500 = $11,439 and FUTA/SUTA stay at $42 and $189, while Medicare keeps charging on every dollar.
Each tax is charged on its own wage base — that is the whole point of the model. Social Security = rate × min(salary, SSA wage base: $184,500 for 2026, $176,100 for 2025 — SSA contribution and benefit base, ssa.gov). Medicare = rate × the full salary, no cap (the extra 0.9% Additional Medicare Tax is employee-only and is not an employer cost, so it is excluded). FUTA = rate × min(salary, $7,000); SUTA = rate × min(salary, its wage base), defaulted here to 2.7% on $7,000 as a stated planning assumption. Workers’ comp, retirement match = rate × salary. Health and other costs are flat yearly amounts. Total employer cost = salary + all components. Multiplier = total ÷ salary. Monthly cost = total ÷ 12. True hourly cost = total ÷ 2,080 (40 hours × 52 weeks). The UK preset charges employer National Insurance at 15% on pay above the £5,000-a-year secondary threshold (2025/26 settings) plus a 3% auto-enrolment pension modelled on full pay for planning simplicity.
Because the salary is only the base. Employer Social Security ($4,960) and Medicare ($1,160) add 7.65% on their own, unemployment taxes add $231, workers’ comp $800, and benefits — $6,000 of health insurance and a $2,400 retirement match — add the rest. The $15,551 of on-costs is a 19.44% burden on top of salary, which is mid-range for a US hire with benefits.
Total employer cost ÷ salary. At 1.1944×, every $1 of salary in an offer letter really commits about $1.19 of budget. It matters most when pricing work: billable rates, project quotes and contractor comparisons built on bare salary quietly lose the on-costs on every hour sold.
Congress set them up differently. Social Security tax applies only up to an annual wage base — $184,500 in 2026 — because benefits are also capped. Medicare’s 1.45% has had no wage cap since 1994, so it charges on every dollar of wages. A calculator that applies 6.2% to a $300,000 salary overstates the employer cost by over $7,000; this one charges 6.2% × min(salary, wage base).
Because they are charged on the first $7,000 of wages only: FUTA at 0.6% (with the full state credit) is $42 a year per employee, and SUTA at the 2.7% default is $189. They matter for headcount budgeting — they are per-employee, so ten hires pay them ten times — but they are minor next to FICA and benefits. Your state’s SUTA rate and wage base may differ; both fields are editable.
Compare like with like: the employee’s true hourly cost — total employer cost ÷ 2,080, here $45.94 — against the contractor’s hourly quote. The contractor’s higher sticker rate often closes much of the gap once the employee’s payroll taxes, benefits, paid leave and idle time are honestly counted, though the contractor brings no paid holiday, training or management cost either.
Employer National Insurance at 15% on pay above the £5,000-per-year secondary threshold (the 2025/26 settings) and a workplace pension at the 3% auto-enrolment minimum, modelled on full pay for planning simplicity, plus your own benefits and other-costs figures in pounds. It does not apply the Employment Allowance or under-21 and apprentice NIC reliefs — lower the rate or raise the threshold to reflect them.
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