Cost concepts
What is Fully-loaded cost?
Total cost of employment
Fully-loaded cost (also called the total cost of employment) is what a W-2 employee actually costs an employer, not just the salary on the offer letter. It adds employer FICA, FUTA, state unemployment tax, workers' compensation, health and retirement benefits, and overhead such as equipment, software, and space on top of base pay.
Knowing the fully-loaded cost is essential for pricing a hire, comparing an employee to a contractor, and setting bill rates. It typically lands well above the salary figure, which is why a hire that looks affordable on salary alone can strain a budget.
Example
A $75,000 salary in Texas carries roughly $24,000 in employer taxes, benefits, and overhead, for a fully-loaded cost near $99,000 before one-time hiring costs.