Employer Payroll Cost Calculator
What an employee actually costs, which is well above the salary. Payroll tax, benefits and fixed per-head costs typically add a quarter to a third on top.
Also called: cost of an employee, true cost of hiring.
No verified rate table is published here for the tax year selected, so no figure is shown. A wrong pay figure is worse than no pay figure.
Computed from the published rates for the tax year you selected, which is not necessarily the current year. A calculation, not tax advice, and it does not know anything about your circumstances beyond the figures entered.
This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for India change on a published schedule; the effective date is shown on every rule-based tool.
How this is calculated
The employer matches Social Security and the base Medicare rate but not the additional Medicare levy. On top of that sit benefits and the fixed cost of having a person at all: equipment, space, software seats and insurance. The multiple of salary is the number worth remembering, and it is why a contractor rate that looks expensive next to a salary often is not.
cost = salary + employer FICA + benefits + fixed costs- S
- Gross salary (currency)
- FICA_e
- Employer's payroll tax (currency)
- b
- Benefits as a share of salary (decimal)
- F
- Fixed costs per employee (currency)
Method and limits
What it assumes
- Benefits are entered as a share of salary, which is how they are usually budgeted.
What it deliberately does not model
- Unemployment insurance, workers compensation and state-level employer levies vary widely and are not included.
- Recruitment cost and the cost of an unfilled seat are one-off rather than annual and are outside this.
Sources
- IRS Publication 15, Employer Tax Guide (primary government)
- SSA. Contribution and Benefit Base (primary government)
Formula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator
Frequently asked questions
- Why is the multiple usually between 1.25 and 1.4?
- Payroll tax alone is about 7.65% of salary up to the wage base. Benefits commonly add ten to twenty-five percent, and fixed per-head costs add the rest.