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Cost to Hire an Employee

See the real all-in cost beyond salary.

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Results

True annual cost
Payroll taxes (~7.65%+)
Benefits
Equipment & overhead
Cost multiplier

Estimate only. Tax rates and benefit costs vary by state and employer.

How it works

We add employer payroll taxes (~9.15% incl. unemployment), benefits as a percent of salary, and equipment plus overhead to base salary, then show the total and the salary multiplier.

Expect 1.25–1.4× salary once taxes, benefits and overhead are included.

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The 1.25–1.4× rule

Hiring experts use a rule of thumb: a W-2 employee costs roughly 1.25 to 1.4 times their base salary once everything is added in. The "everything" is payroll taxes (the employer half of Social Security and Medicare, ~7.65%, plus unemployment), benefits (health, retirement match, PTO — often 20–30% of salary), and the overhead of giving someone a place to work and the tools to do it.

Budget the real number

A $60,000 hire can easily cost $80,000+ all-in. Knowing the multiplier keeps you from under-budgeting a role or mispricing a project that depends on that person’s time. Adjust the benefit and overhead percentages to your situation — they’re the biggest swing factors.

Good to know

FAQs

How much more than salary does an employee cost?

Typically 25–40% more, all-in.

What's in the multiplier?

Employer payroll taxes, benefits, PTO, equipment and overhead.

Why does this matter?

It prevents under-budgeting roles and mispricing client work.

Is this financial advice?

No — it's an estimate.