Labour & prime cost
True Cost of an Employee
This person's wage is one number. What do they actually cost me per hour?
The wage on the offer letter is not what the position costs. Employer payroll taxes, workers' compensation, and benefits sit on top of it. Enter the wage and the rates you actually pay.
Your numbers
Pre-filled with a worked example so you can see how it behaves. Type over any field with your own figures. Nothing you enter is sent anywhere.
The answer
How this is calculated
Weekly wages = hourly wage × hours per week
Weekly taxes = weekly wages × (payroll tax % + workers' comp %)
Weekly fixed cost = (monthly benefits + other monthly) ÷ 4.333
True cost per hour = (weekly wages + weekly taxes + weekly fixed) ÷ hours per week
What this does not tell you
- Payroll tax rates vary by state and by your unemployment experience rating. Use the effective rate from your payroll provider, not a national average.
- This is not tax or employment-law advice. Tip credits, overtime rules, and benefit mandates differ by state.
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