Total Annual Cost
$92,230
Total Monthly Cost
$7,686
Overhead Percentage
23.0%
What is the true cost of an employee?
The true cost of an employee goes well beyond their salary. Employers must pay their share of FICA taxes (Social Security and Medicare), federal unemployment tax (FUTA), state unemployment tax (SUTA), and often provide benefits such as health insurance, retirement contributions, and other perks. On average, employer overhead adds 20-40% on top of the base salary.
What is FUTA?
FUTA (Federal Unemployment Tax Act) is a federal employer-only tax that funds state unemployment insurance programs. The gross FUTA rate is 6.0% on the first $7,000 of each employee's wages. However, employers receive a 5.4% credit for timely SUTA payments, making the effective FUTA rate 0.6% (maximum $42 per employee per year).
How much is employer FICA?
Employers match the employee's FICA contribution: 6.2% for Social Security (on wages up to $176,100 in 2025) and 1.45% for Medicare (no wage cap). Unlike employees, employers do not pay the Additional Medicare Tax of 0.9%. The combined employer FICA rate is 7.65% on most wages.
IRS-Aligned: This calculator uses official 2025 FICA and FUTA rates. Actual costs may vary based on state unemployment taxes and specific benefit plans.
Disclaimer: This calculator provides estimates based on current IRS rates and thresholds for the 2025 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your filing status, state of residence, deductions, and individual circumstances. Always consult a qualified tax professional or CPA before making financial decisions. Read our terms
This calculator uses official rates and thresholds from:
- IRS Publication 15 (Circular E) — Employer's Tax Guide
- IRS Publication 15-B — Employer's Tax Guide to Fringe Benefits
- IRS Topic 751 — Social Security and Medicare Withholding Rates
Last verified: March 2026 · Tax year 2025. Results are indicative — consult a qualified accountant for personalised advice.