Calculator · 2026
Cost to hire calculator
The exact first-year cost of a new employee — before you sign the offer. Add a salary and state and this tool computes the fully-loaded recurring cost (payroll taxes, workers' comp, benefits, overhead) and the one-time costs of bringing someone on (recruiting, onboarding, equipment), then totals your true year-one outlay.
How the first-year cost is built
A salary is only the visible part of a hire. Every US employer also pays mandatory payroll taxes— Social Security, Medicare, federal unemployment (FUTA), and state unemployment (SUI) — on top of wages, plus workers' compensation, the benefits you offer, and the overhead of a desk, tools, and management time.
Year one also carries costs that never repeat: the recruiting spend to find the person, onboarding and training before they are productive, and the equipment and software to set them up. This calculator keeps those separate so you can see both your true first-year outlay and your steady-state annual cost.
Want a deeper walkthrough of every line item? Read how much it costs to hire an employee, or weigh a W-2 hire against a contractor with the contractor vs employee comparison. Start from the true cost of hiring calculator for a full W-2 vs 1099 view.
Cost-to-hire FAQ
- What does it really cost to hire an employee?
- The first-year cost of a hire is far more than salary. On top of base pay, employers owe FICA (6.2% Social Security + 1.45% Medicare), FUTA, and state unemployment (SUI) tax, plus workers' compensation, health and retirement benefits, and operating overhead. Add one-time recruiting, onboarding, and equipment costs and a typical first-year cost runs 1.3 to 1.5 times the salary — often more for the first year because of setup expenses.
- What is included in the first-year cost to hire?
- This calculator splits cost into recurring and one-time. Recurring (every year): base salary, employer payroll taxes, workers' comp, benefits, overhead, and software/tools. One-time (year one only): recruiting, onboarding and training, and equipment and setup. The headline number adds the one-time costs to the first full year of recurring cost.
- Why is the first year more expensive than later years?
- Recruiting fees, onboarding and training time, and the upfront cost of a laptop, desk, and account setup all land in year one and do not repeat. After the first year you typically only carry the recurring cost — salary, taxes, benefits, overhead, and renewing software.
- How accurate are the default rates?
- Federal payroll-tax constants come from IRS Publication 15 (Circular E), and new-employer state unemployment rates and wage bases come from each state's unemployment-insurance agency. New-employer SUI is used because that is the rate you face on your first hire. Benefits, overhead, and one-time costs are editable estimates — adjust them to match your business.
W-2 or 1099?
Compare the fully-loaded cost of an employee against a contractor for the same work.