Employee Cost Calculator
The true cost of an employee is typically 1.2x–1.4x their base salary. Enter compensation, taxes, benefits, and overhead to see the full picture — and whether you need financing to make the hire.
Gross wages before taxes
Using federal defaults (SS 6.2%, Medicare 1.45%, FUTA 0.6%, SUTA 2.7%) — click to adjust
Annual employer premium contribution
% of salary (e.g. 3% 401k match)
Life insurance, FSA, transit, etc.
Laptop, software, phone, etc.
First-year and ongoing training
% of salary — default 1.5%
Office space allocation, supplies, etc.
True Cost Summary
Rule of Thumb
Expect to spend 1.2x–1.4x base salary on each W-2 employee. High-benefit roles or specialized hires can reach 1.5x. Use this as your planning floor.
Contractor Comparison
A 1099 contractor eliminates payroll taxes and benefits — but typically charges 20–40% more per hour. Best for variable, project-based work rather than ongoing roles.
Financing the Hire
If the revenue a new hire generates takes 3–6 months to ramp, a line of credit lets you draw as needed and pay down as revenue builds — without locking in a term loan.
Frequently Asked Questions
Planning to grow your team?
A Pezzula advisor can help you find the right financing to support new hires — from working capital lines of credit to SBA loans structured around your payroll timeline.