B/Billable Toolkit
Free calculators for freelancers & small businesses
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Employee Cost Calculator

A salary is only part of what an employee costs. Add the rest before you hire or price your services.

$
%
$
Health cover, pension top-ups, training
$
hrs
After leave, holidays and meetings

Cost

How it’s calculated

Employer taxes are added as a percentage of salary, then benefits and equipment are added as yearly amounts. Dividing by productive hours gives the real hourly cost.

total = salary × (1 + employer tax) + benefits + equipment

Worked example

A $45,000 salary with 12% employer taxes, $4,500 of benefits and $2,400 of equipment costs $57,300 a year. That is 1.27 times the salary, or $33.71 for each of 1,700 productive hours.

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Questions

How much more than salary does an employee cost?

Commonly 1.2–1.4× salary once taxes, benefits and equipment are included, depending on the country.

Why use productive hours?

Paid leave, holidays and admin time are paid for but not productive, so the real hourly cost is higher.

Doing these numbers every month? Accounting software can automate invoices, reminders and tax reports.

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