Employee Cost Calculator: The True Cost of a Hire
Before you post a job, see what the hire costs: wages plus employer payroll taxes, workers' comp and benefits, a year, a month and for every hour worked. A $20-an-hour employee in Texas costs about $46,523 a year before benefits.
Total cost a year
—
| Wages | |
|---|---|
| Social Security (6.2%) | |
| Medicare (1.45%) | |
| Federal unemployment (FUTA) | |
| State unemployment (SUTA) | |
| Workers' comp | |
| Health insurance | |
| 401(k) match | |
| Other benefits | |
| Equipment and training | |
| Total |
FUTA here includes the credit reduction expected for California in 2026 (1.5%). The Department of Labor confirms it on November 10, 2026; it is paid with the year-end Form 940.
Estimates with 2026 federal rates. State unemployment and workers' comp rates differ by employer; use the rates on your notices and insurance quote. Not tax or legal advice.
State unemployment tax for new employers
Standard new-employer rate and taxable wage base for 2026, and the yearly payroll tax on one $20-an-hour full-time employee (employer FICA, FUTA and SUTA, before workers' comp).
| State | New-employer rate | Wage base | SUTA a year | All payroll taxes |
|---|---|---|---|---|
| Alabama | 2.7% | $8,000 | $216 | $3,440 |
| Alaska | 1% | $54,200 | $416 | $3,640 |
| Arizona | 2% | $8,000 | $160 | $3,384 |
| Arkansas | 2% | $7,000 | $140 | $3,364 |
| California | 3.5% | $7,000 | $245 | $3,574 |
| Colorado | 3.05% | $30,600 | $933.30 | $4,158 |
| Connecticut | 1.9% | $27,000 | $513 | $3,737 |
| Delaware | 1.31% | $14,500 | $189.95 | $3,414 |
| District of Columbia | 2.9% | $9,000 | $261 | $3,485 |
| Florida | 2.7% | $7,000 | $189 | $3,413 |
| Georgia | 2.7% | $9,500 | $256.50 | $3,481 |
| Hawaii | 2.41% | $64,500 | $1,003 | $4,227 |
| Idaho | 1% | $58,300 | $416 | $3,640 |
| Illinois | 3.35% | $14,250 | $477.38 | $3,702 |
| Indiana | 2.5% | $9,500 | $237.50 | $3,462 |
| Iowa | 1% | $20,400 | $204 | $3,428 |
| Kansas | 1.75% | $15,100 | $264.25 | $3,489 |
| Kentucky | 2.7% | $12,000 | $324 | $3,548 |
| Louisiana | By industry | $7,000 | — | — |
| Maine | 2.54% | $12,000 | $304.80 | $3,529 |
| Maryland | 2.6% | $8,500 | $221 | $3,445 |
| Massachusetts | 2.42% | $15,000 | $363 | $3,587 |
| Michigan | 2.7% | $9,000 | $243 | $3,467 |
| Minnesota | 1.6% | $44,000 | $663.94 | $3,888 |
| Mississippi | 1% | $14,000 | $140 | $3,364 |
| Missouri | 2.38% | $9,000 | $213.84 | $3,438 |
| Montana | 1.18% | $47,300 | $490.88 | $3,715 |
| Nebraska | 1.25% | $9,000 | $112.50 | $3,337 |
| Nevada | 3% | $43,700 | $1,248 | $4,472 |
| New Hampshire | 2.7% | $14,000 | $378 | $3,602 |
| New Jersey | 2.8% | $44,800 | $1,165 | $4,389 |
| New Mexico | 1% | $34,800 | $348 | $3,572 |
| New York | 4.1% | $17,600 | $721.60 | $3,946 |
| North Carolina | 1% | $34,200 | $342 | $3,566 |
| North Dakota | 1% | $46,600 | $416 | $3,640 |
| Ohio | 2.85% | $9,000 | $256.50 | $3,481 |
| Oklahoma | 1.5% | $25,000 | $375 | $3,599 |
| Oregon | 2.4% | $56,700 | $998.40 | $4,223 |
| Pennsylvania | 3.82% | $10,000 | $382.20 | $3,607 |
| Rhode Island | 1% | $30,800 | $308 | $3,532 |
| South Carolina | 1.06% | $14,000 | $148.40 | $3,373 |
| South Dakota | 1.75% | $15,000 | $262.50 | $3,487 |
| Tennessee | 2.7% | $7,000 | $189 | $3,413 |
| Texas | 2.7% | $9,000 | $243 | $3,467 |
| Utah | By industry | $50,700 | — | — |
| Vermont | 1% | $15,400 | $154 | $3,378 |
| Virginia | 2.5% | $8,000 | $200 | $3,424 |
| Washington | By industry | $78,200 | — | — |
| West Virginia | 2.51% | $9,500 | $238.45 | $3,463 |
| Wisconsin | 3.05% | $14,000 | $427 | $3,651 |
| Wyoming | By industry | $33,800 | — | — |
How it's calculated
- Wages: hourly wage × hours × 52, or the salary. Paid days off are part of the wages.
- Employer FICA: 6.2% Social Security on wages up to $184,500 and 1.45% Medicare on all wages.
- FUTA: 0.6% of the first $7,000 of wages, plus any credit reduction in your state.
- SUTA: your state rate on wages up to the state's taxable wage base.
- Workers' comp: the rate per $100 of wages. Benefits: health premiums you pay, the 401(k) match on wages, and other benefits.
- Cost per hour worked: the total ÷ (paid hours − paid days off × 8).
Frequently Asked Questions
How much does an employee cost on top of wages?
Usually 10% to 40% more than the wage. Payroll taxes alone add about 8% (Social Security and Medicare 7.65%, plus federal and state unemployment), then workers' comp, health insurance, retirement match and paid time off. A $20-an-hour employee in Texas costs about $46,523 a year with taxes and workers' comp only, and $53,771 with $500 a month of health cover, a 3% match and 10 paid days off.
What payroll taxes do employers pay?
Social Security (6.2% of wages up to $184,500) and Medicare (1.45% of all wages), the same amounts withheld from the employee; federal unemployment tax (FUTA, 0.6% of the first $7,000 after the state credit, so $42 a worker); and state unemployment tax (SUTA). On a $50,000 salary employer FICA is $3,825.
What is FUTA and how is it calculated?
The federal unemployment tax is 6% of the first $7,000 each employee earns in the year. Employers who pay their state unemployment tax on time get a credit of up to 5.4%, so most pay 0.6%. In California the credit is cut because the state owes the federal unemployment fund, so FUTA costs more.
What SUTA rate should I use?
Your state sends you a rate each year. New employers get a standard new-employer rate until they have a few years of claims history; the calculator fills that in for your state, but use the rate on your notice if you have one. Construction employers often get a higher new-employer rate.
How is workers' comp priced?
In dollars per $100 of payroll, by job class: office work can be under $0.50, while roofing or heavy construction can be $10 or more. The amount depends on your state, the class codes and your claims history; your insurance carrier or agent will quote it.
What is the true hourly cost of an employee?
The total yearly cost divided by the hours the person actually works. Paid days off count as pay but not as hours worked: the Texas example with benefits costs $26.89 for each hour worked on a $20 wage.
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