Employee Cost Calculator
Estimate the fully loaded cost of an employee from salary, employer payroll taxes, benefits and overhead, per year, month and hour. Enter the pay, add health insurance, a retirement match, paid time off and equipment, and keep or edit the 2026 federal tax defaults. Compare up to three candidates or scenarios side by side.
Who you are costing
Shown in the comparison only. Labels are never put in the page address or sent anywhere.
Also sets the hours a day for the cost per worked hour (5 days a week).
For a rep, the variable part of on-target earnings (OTE). Taxed as wages.
Benefits and time off
Life and disability insurance, commuter benefits, a car allowance, stipends.
Paid days not worked. They are part of the pay, not added to it; they are shown as a cost and spread the total over fewer hours.
Equipment, software and overhead
Laptop, phone, CRM and other seats, samples, a vehicle if you provide one.
Office space, support staff, management time if you allocate it. Leave both empty to exclude overhead.
Shows the total cost as a share of quota.
Employer payroll taxes (2026 defaults, editable)
Federal defaults as published by the IRS; state unemployment and workers' compensation vary by state and employer, so enter your own.
No cap
Your state's taxable wage base. Leave empty to apply the rate to all wages.
From your policy: rates differ by job class and state.
Federal defaults checked on irs.gov and ssa.gov on 2026-10-13.
Fully loaded cost: Candidate 1
Total cost a year
$110,127
A month
$9,177.25
Per worked hour
$58.58
235 worked days, 1,880 hours
Times base pay
1.57×
This employee's figure; 1.22 × pay including bonus or commission
Cost as share of quota
18.4%
Pay for days not worked
$6,730.77
25 PTO and holiday days, part of the pay above
Where the money goes
- Pay$90,000 (82%)
- Employer taxes$6,927 (6%)
- Benefits$10,800 (10%)
- Equipment and software$2,400 (2%)
Employer tax lines
- Social Security (employer share): $90,000 × 6.20%$5,580
- Medicare (employer share): $90,000 × 1.45%$1,305
- FUTA (after the state credit): $7,000 × 0.60%$42
- State unemployment (SUTA): $90,000 × 0.00%$0
- Workers' compensation, % of pay: $90,000 × 0.00%$0
Not included: recruiting, training time, the manager's time and the months before a new hire is fully productive. An estimate, not tax or legal advice.
What you type is not sent to ParrotNotes.
How the cost of an employee is worked out
Total annual cost = pay (base plus bonus or commission) + employer payroll taxes + benefits + equipment and software + overhead. Paid time off is already inside the pay, so it is not added again: the calculator shows what the paid days off cost and spreads the total over the hours actually worked.
Worked example: a rep on a $70,000 base with $20,000 of commission, so $90,000 of pay. Employer taxes: Social Security $90,000 × 6.2% = $5,580, Medicare $90,000 × 1.45% = $1,305, FUTA $7,000 × 0.6% = $42, state unemployment at 3% on a $9,000 wage base = $270, workers' compensation at 1% = $900, together $8,097. Benefits: health insurance at $600 a month = $7,200 and a 4% retirement match = $3,600, together $10,800. Laptop, phone and CRM seat: $2,400. Total: $111,297 a year, or $9,274.75 a month.
With 15 days of paid time off and 10 paid holidays, 235 of the 260 working days are worked, 1,880 hours at 8 a day, so the rep costs $59.20 per worked hour. The total is 1.59 times the base salary and 1.24 times the pay including commission. Against a $600,000 quota, the rep costs 18.5% of quota.
Employer payroll taxes in 2026
The employer pays its own share of Social Security and Medicare on top of what is withheld from the employee: 6.2% for Social Security on wages up to the 2026 wage base of $184,500, and 1.45% for Medicare on all wages. The 0.9% Additional Medicare Tax on wages over $200,000 is withheld from the employee only; there is no employer match, so it is not an employer cost.
Federal unemployment tax (FUTA) is 6.0% on the first $7,000 paid to each employee in the year, with a credit of up to 5.4% for state unemployment tax paid, so most employers pay 0.6%, which is $42 per employee a year. State unemployment tax and workers' compensation insurance vary by state, by the employer's experience rating and by job class: take the rate and wage base from your state notice and your policy and type them in. Every default is editable, and the table below the calculator names the IRS and SSA pages the figures come from.
The true cost of a sales hire
For a rep, start from on-target earnings: base plus the commission or bonus at quota. Commission is wages, so it carries payroll taxes and often a retirement match too. Add the CRM seat, the phone, samples and a vehicle or mileage if you provide them, and the cost as a share of quota tells you what the territory has to produce before the hire pays for itself.
What the calculator does not count is often larger: the recruiter's fee, the manager's time in onboarding and ride-alongs, and the months before a new rep is fully productive, during which the base salary is paid against little or no revenue. Keep those in the hiring plan even though they are not in this figure. For what a rep's departure costs, see the post on sales rep turnover.
Multipliers and what this calculator leaves out
You will see a rule of thumb that an employee costs 1.25 to 1.4 times their salary. It is only a rule of thumb: the multiplier depends on the pay level (the Social Security wage base and the $7,000 FUTA base make taxes a smaller share of a high salary), on whether you pay for health insurance, and on how much equipment and office space the role needs. The calculator reports the multiplier for this employee from the numbers you entered.
Not included: recruiting costs, training time, management time, ramp-up, severance, and any state or local payroll taxes beyond the unemployment and workers' compensation rates you enter. The result is an estimate for planning, not tax or legal advice. To size a team in headcount rather than dollars, use the FTE calculator; to price an hour of meeting time, the meeting cost calculator takes this hourly figure as its input.
Federal employer tax defaults for 2026
| Tax | Employer rate | On wages up to | Source |
|---|---|---|---|
| Social Security (employer share) | 6.2% | $184,500 | IRS Topic 751; SSA contribution and benefit base |
| Medicare (employer share) | 1.45% | No cap | IRS Topic 751 |
| FUTA after the state credit | 0.6% | $7,000 | IRS Topic 759 |
Checked on irs.gov and ssa.gov on 2026-10-13. State unemployment tax and workers' compensation have no default: they vary by state and employer.
An estimate from the numbers you enter and the federal rates checked on irs.gov and ssa.gov on the date shown in the table. State rates must come from your state notice and your workers' compensation policy. This is not tax or legal advice.
Sources:
For sales leaders and owners hiring a rep: sales rep turnover, sales onboarding, staffing sales, field sales management.
The biggest hidden cost of a rep is time not spent selling
Every hour a rep spends typing up call notes in the office is an hour of this cost with no customer in front of them. ParrotNotes records the call or the visit and gives the summary and follow-up, so the notes are done when the rep gets back to the car. Free for 100 minutes of recording a month.
Get ParrotNotes freeRelated tools
- FTE CalculatorTurn hours worked into full-time equivalents (FTE) for a team, or work out how many people a set of hours needs.Open the tool
- Meeting Cost CalculatorEnter who is in the room, their pay and the meeting length, and see what one meeting and a recurring series really cost.Open the tool
- Hourly to Salary CalculatorConvert an hourly wage to a yearly, monthly, biweekly and weekly salary, or a salary back to an hourly rate.Open the tool
- Freelance Rate CalculatorWork out the hourly, day and project rate you need as a freelancer or consultant from your target income, costs, time off and billable hours.Open the tool