Employee Cost Calculator

2026 rules

Add up what an employee really costs beyond the wage.

Your numbers

Yearly wage

Employer share of health insurance (yearly)

Retirement match (% of pay)

State unemployment tax rate

New employers usually get a starting rate; check your state notice.

State unemployment wage base

Workers' comp rate (% of pay)

Other costs (equipment, training, software)

Paid hours per year

Result

Total yearly cost of the employee$70,139

Wage$55,000
Social Security 6.2% + Medicare 1.45%$4,208
FUTA (0.6% of first $7,000)$42
State unemployment$189
Health insurance$7,000
Retirement match$1,650
Workers' comp$550
Other$1,500
Total cost$70,139
Cost per paid hour$33.72
Cost over wage27.5%

How it works

Employers pay 6.2% Social Security on wages up to $184,500 and 1.45% Medicare on all wages, plus federal unemployment of 0.6% on the first $7,000. State unemployment rates and wage bases vary by state and by your claims history.

Benefits usually add the most: the employer's share of health premiums, any retirement match, and workers' compensation insurance.

2026 figures: IRS Rev. Proc. 2025-32 (2026 inflation adjustments); IRS Notice 2025-67 (2026 retirement plan limits); SSA 2026 COLA fact sheet; IRS Notice 2026-10 and Announcement 2026-11 (mileage).

Questions

Is FUTA really only $42?

Yes, when your state unemployment taxes are paid on time and the state isn't in a credit-reduction status. Then the 6% FUTA rate nets to 0.6%.

Do contractors cost less?

No payroll taxes or benefits are owed for a real contractor, but misclassifying an employee brings back taxes, penalties and interest.