RRollCallOperator Tools

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 figures stay here. The calculator runs on this device; the share link stores its numbers after the # in the URL.
Worked answer$20.39See it ↓
01

Your numbers

A worked example is already loaded. Replace any field with the figures from the source named beside it.

Hourly wageOffer letter or payroll
$18.00

The base hourly rate you pay.

Hours per weekSchedule
32 hrs

Scheduled straight-time hours in a normal week. For more than 40 hours, use the overtime calculator so premium pay is not understated.

Employer payroll taxesPayroll provider report
9%

Your employer-side share: Social Security and Medicare, plus federal and state unemployment. Your payroll provider reports the effective rate.

Workers' compensationWorkers' comp policy
2.5%

Your workers' compensation rate for this job class, as a percentage of wages.

Benefits per monthBenefits statement
$0.00

Employer contribution to health, retirement, or other benefits for this person.

Other cost per monthYour own records
$45.00

Uniforms, meals, parking, training, software seats, and anything else this seat costs.

02

The answer

True cost per hour

$20.39

13.3% on top of a $18.00 wage

  • Cost per week$652.62
  • Cost per year$33,936
  • Base wages per week$576.00
  • Payroll taxes and workers' comp per week$66.24
  • Benefits and other per week$10.38
  • Burden on top of wage13.3%
  • Cost per month$2,828
03 Show the arithmetic
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
04 What the answer leaves out
  • This calculator covers up to 40 straight-time hours per week. It deliberately stops above 40 rather than guess which overtime rule applies.
  • 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.
Continue if it helps

The number is the start of the decision.

story Read the ten-minute closeoutTurn a vague shift recap into five observations that can actually change the next service.
Same operating area
01 Prime Cost CalculatorCost of goods plus total labour, against sales. 02 Labour Cost & Sales Per Labour HourLabour percentage, sales per labour hour, and cost per hour worked. 03 Overtime Cost CalculatorWhat overtime costs against hiring another person.