Payroll Burden Rate Calculator
What does an employee actually cost you? Beyond the base wage, employer payroll taxes, benefits, PTO, workers' comp, and overhead can add 20–40% to your true labor cost. Calculate your real cost per employee.
2025 tax rates pre-filledIncludes PTO & benefits costTrue hourly cost output
1Base Compensation
2Mandatory Employer Taxes
Pre-filled with 2025 federal rates. Update SUTA for your state.
%
6.2% (employer)
%
1.45% standard
%
0.6% on first $7K
%
Varies by state
3Benefits (Monthly Employer Cost)
Enter the employer's monthly contribution for each benefit.
Varies widely by industry classification code.
Calculated as days × daily wage rate.
%
4Additional Overhead (optional)
Annual costs directly attributable to this employee.
Enter a base wage to see the true cost of this employee.
Frequently Asked Questions
What is a payroll burden rate?
The payroll burden rate is the percentage of additional costs above an employee's base salary that the employer must pay. It includes mandatory payroll taxes (FICA, FUTA, SUTA), benefits (health insurance, retirement, PTO), and any other costs directly attributable to employing that person. A typical burden rate ranges from 18–35% depending on the benefits package.
What is SUTA and how do I find my rate?
SUTA (State Unemployment Tax Act) is a state-level unemployment insurance tax paid by employers. Rates vary by state and by your company's unemployment claims history (experience rating). New employers typically start at a standard rate (often 2–3%) and adjust over time. Contact your state's Department of Labor or check your quarterly SUTA tax notice for your current rate.
Why does PTO cost money if the employee is already paid?
PTO represents days where you're paying the employee but receiving no productive output. If an employee earns $60,000/year and takes 10 days of PTO, you're paying approximately $2,308 for days where no work is performed. This is a real cost that should be factored into your true labor cost calculations.
How do I use this for job costing or pricing?
The 'true hourly cost' output is the number to use when pricing jobs or calculating project labor costs. If your true hourly cost is $45/hr but you're billing at $50/hr for labor, your actual labor margin is only 11% — not the 50%+ you might assume from the base wage. Use the true hourly cost as your floor when setting labor rates.
Does this include owner compensation?
This calculator is designed for W-2 employees. For S-Corp owner-operators, the payroll tax structure is different — use our S-Corp Salary Calculator to determine reasonable compensation and our LLC vs. S-Corp Calculator to model the overall tax impact of your entity structure.