HR & finance · Free calculator

Employee True Cost Calculator

Calculate the fully-loaded cost of an employee including taxes, benefits, equipment, and overhead. Reveals true hourly rate vs. base salary.

Short answer

Employee True Cost Calculator

$138,564Fully-loaded annual cost

🟢 34.5% burden in the normal 25–35% range. Cash comp $103,000 + employer taxes $9,764 + health $9,600 + 401k match $3,800 + equipment $4,800 + overhead $7,600 = $138,564 all-in. Over 1,740 productive hours, that's $79.63/hour — vs. $45.67 from the base-salary number.

How it's calculated: $79.63/productive hour · 34.5% burden above cash comp Adjust the inputs below to recalculate for your own numbers.

Disclaimer: Educational only — not legal, tax, or HR advice. Industry medians sourced from BLS, SaaS Capital, OpenView SaaS Benchmarks, and SBA Office of Advocacy. Your situation may differ materially.

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Annual base salary ($)$95,000

Annual bonus/commission ($)$8,000

Employer health insurance ($/yr)$9,600

401(k) match (% of salary)4%

Paid time off (days/yr)18

Equipment + software + office ($/yr)$4,800

Allocated overhead (% of salary)8%

HR, finance, mgmt overhead allocation.

Try it like this

Tap a scenario to load realistic numbers, then tweak the sliders.

Related calculators

Freelance hourly rate Contractor vs. employee Employee cost guide

Formula used

Loaded cost stack

Typical burden is 25–35% above cash comp. Hourly equivalent uses ~1,700 productive hours/year after PTO, holidays, sick days.

Total = Cash + Payroll Taxes (~9%) + Benefits + Equipment + Overhead

Typical burden %

25–35%

Employer FICA

7.65% to SS cap

Health (per employee)

$8K–$15K/yr

Productive hours/yr

~1,700

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  data-calculator="employee-true-cost-calculator"
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RevenueLab. (2026). Employee True Cost Calculator. Retrieved from https://www.revenuelab.fyi/employee-true-cost-calculator

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Source: [Employee True Cost Calculator — RevenueLab](https://www.revenuelab.fyi/employee-true-cost-calculator) (2026).

Why startups underprice headcount

Founders see $95K offer and think '$95K.' Reality is ~$125K all-in. Project budgets built on base salaries always blow up — pad headcount lines by 30–35% for SMB, 40–50% for fully-loaded enterprise (including office space).

Remote employee math is different

Remote saves $5–10K/yr per head on office, but adds equipment, home-office stipends, and travel for team meetings. Net savings ~$3–5K. The big remote win is talent geography arbitrage, not direct cost.

The hidden 1099 trap

Misclassifying a W2 employee as 1099 saves 25–30% on burden — and triggers IRS/DOL audits with back-payroll-tax penalties of 100%+. If you set their hours and supply their tools, they're W2. Don't optimize around the IRS.

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FAQ

What's the right overhead allocation?

Typical SMB: 8–12% of payroll. Includes HR, finance, recruiting, mgmt time per direct report. Use 5% for very lean, 15%+ for heavy mgmt structure.

How does this differ from a contractor?

Contractors are ~1.0× base rate (you pay only what you bill). Employees are ~1.30× base + benefits. Contractor seems cheaper but lacks long-term IP, training investment, and predictability.

Should I include equity?

Yes, for total comp comparisons. Use the Black-Scholes value or recent 409a-adjusted value. Cash-flow burden is zero (until exit) but enterprise value cost is real.

How this calculator is built

Independently maintained

Written by Sam Doshi and the RevenueLab editorial team. We don't sell the data feeds this tool is built on.

Sourced from primary data

Benchmarks come from public AdSense / Stripe / IRS disclosures and reader-submitted data — never third-party "$X per view" claims. Full methodology.

Last editorial review

Reviewed on a rolling quarterly cycle. Dated reviews are published on the methodology record for each calculator.

Editorial standards

See our editorial policy and disclaimer. Results are estimates, not advice.

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