How to use this calculator
- Enter or choose gross annual salary.
- Enter or choose employer social contributions.
- Enter or choose employer pension or retirement contribution.
- Enter or choose other percentage costs.
- Enter or choose benefits and fixed costs per year.
- The total annual cost to employer updates as you type. Use Copy result or Share to keep it.
Method
On-cost = Salary × (Social% + Pension% + Other%) ÷ 100 + Benefits; Total = Salary + On-cost; Multiple = Total ÷ Salary
- Social%
- employer social security or payroll tax rate you enter
- Benefits
- fixed annual costs per employee
Worked example
- Percentage costs = 50,000 × (10 + 5 + 1)% = $8,000.
- On-cost = 8,000 + 6,000 benefits = $14,000.
- Total = 50,000 + 14,000 = $64,000, which is 1.28 × salary or $5,333.33 a month.
With 16% of percentage-based costs and $6,000 of benefits, a $50,000 employee costs the employer $64,000 a year.
What the result means
Use the multiple to budget a new hire or to compare an employee with a contractor’s day rate. Remember that recruitment, office space and management time add further cost.
Assumptions and limits
- All percentage costs are charged on the full gross salary; contribution rates are the ones you enter.
- Real employer contributions often have thresholds, wage caps or bands, so a flat percentage can over- or under-state them. Check your payroll provider or the official tax authority for exact figures.
Questions
What multiple of salary does an employee cost?
It varies widely by country and benefits. Enter your own rates; the result shows the multiple for your situation.
Why are no country rates built in?
Employer contribution rates, thresholds and caps change regularly and differ by country, state and contract type, so you enter the rates that apply to you.
Please note: This calculator gives estimates for planning. It is not financial advice, and lenders’ actual terms, fees and rounding may differ.