Fully Loaded Cost of an Employee: A Worksheet With Example

Build the total from these groups, and gather actual figures from your payroll and benefits providers:

• Base pay. Salary or hourly wages, plus expected bonuses or commissions.
• Employer payroll taxes. The employer share of Social Security and Medicare, plus federal and state unemployment taxes. Rates and wage limits change, so confirm current figures with your payroll provider or accountant.
• Benefits. The employer's share of health insurance, retirement plan matching, and any other benefits such as dental, vision or life insurance.
• Insurance and compliance. Workers' compensation, and any state-specific charges that apply to employees.
• Equipment and software. A laptop, phone, desk, and per-seat software licenses.
• Training and development. Courses, conferences, certifications and manager time.
• Recruiting and onboarding. The hiring cost, spread over the expected time the person stays.
• Space and overhead. Office space, utilities and admin support, if you allocate them.

Not every company counts all of these. Decide which to include and keep the rule the same every time you calculate.

In this example, say you're hiring an operations coordinator at $80,000 a year. Here's one way the numbers could add up:

1. In this example, base pay is $80,000.
2. In this example, employer payroll taxes are about 8 percent, or $6,400.
3. In this example, the employer share of health insurance is $9,000.
4. In this example, a retirement match of 3 percent adds $2,400.
5. In this example, laptop and setup cost $2,000, spread over the first year for simplicity.
6. In this example, software seats cost $1,800, workers' compensation is $400, and training is $1,000.

In this example, the fully loaded cost is $103,000, or about 1.29 times base pay. Your multiplier will differ, because benefits, tax rates and equipment vary. Treat any rule-of-thumb multiplier you find online as a starting guess, and replace it with your own figures.

An annual figure isn't useful for pricing work until you divide by productive hours. A full-time year has about 2,080 paid hours, but paid time off, holidays and sick days aren't productive.

In this example, assume 200 hours of holidays, vacation and sick leave. In this example, that leaves 1,880 productive hours, so the $103,000 loaded cost works out to about $55 an hour. In this example, the worker's wage-only rate would be about $38 an hour, so using salary alone would understate the real cost by roughly a third.

Use the loaded hourly figure when you value time in an automation ROI calculation, when you set prices for billable work, and when you compare doing a task in-house with paying someone else.

It rises for reasons beyond raises. Benefit costs are often the fastest-moving piece. The BLS Employment Cost Index shows total compensation for civilian workers up 3.4 percent over the 12 months to March 2026¹, and that includes both wages and benefit costs.

Rebuild your worksheet at least once a year, and again whenever you change benefits, add a state, or shift the mix of full-time and part-time staff. If you hire in another state, taxes and insurance rules can differ, so ask your accountant or payroll provider before you assume your existing numbers apply.

The worksheet also helps you compare options. A contractor's hourly rate looks higher than an employee's loaded hourly cost, but the contractor's rate usually covers their taxes, benefits, equipment and downtime, so the fair comparison is against your loaded cost. Classification matters here, so read up on the rules before you treat someone as a contractor, and confirm with an attorney or accountant.

For outsourced options, compare against PEO cost per employee benchmarks and employer of record costs by country. To include recruiting in your own figure, use the cost per hire worksheet.

Your payroll and HR system already holds most of the inputs. A payroll provider such as Gusto can report employer taxes and benefit contributions per employee, and an HR platform such as Rippling can connect payroll, benefits, devices and software seats, so more of the total is visible in one place. To choose between platforms, read payroll and HR platform comparison. Ask each vendor in a demo how it reports employer costs per person, and export the data into your worksheet.