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Free USA Cost of Hiring Calculator

Salary is only part of what a new employee costs. Add 2026 federal employer payroll taxes, your state unemployment tax, benefits and the one-time cost of finding and onboarding someone to see the full first-year number.

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2026 federal rates

The role

Example values are filled in so you can see how it works. Replace them with your own figures.

Annual salary

Number of hires

Whole number, minimum 1

Paid hours per year

2,080 = 40 hours × 52 weeks

Employer payroll taxes

Federal taxes are applied automatically at 2026 rates. State unemployment and workers' comp depend on your state and insurer.

State unemployment (SUTA) rate

Use the rate on your state notice. US DOL: unemployment insurance

SUTA taxable wage base

Set by your state. US DOL: unemployment insurance taxes

Workers' comp rate

From your insurer. US DOL: workers' compensation

FUTA creditUS DOL: FUTA credit reduction states

Social Security: employer pays 6.2% on wages up to $184,500 in 2026. SSA: contribution and benefit base · IRS Topic 751
Medicare: employer pays 1.45% on all wages, with no cap. IRS Topic 751
FUTA: 6.0% on the first $7,000 per employee, usually reduced to 0.6% by the state credit. IRS Topic 759

Benefits

Example amounts only. Use the figures from your own plans.

Health insurance, employer share per year

Retirement match

Percent of salary

Other benefits per year

Dental, vision, life, perks

One-time hiring costs

Counted once, in the first year only.

Job ads and job boards

Recruiter or agency fee

Percent of salary, if you use one

Background and drug checks

Interview and admin hours

Interviewer cost per hour

Equipment and software

Training and onboarding

Months to full productivity

Up to 12 months

Average output lost while ramping

First-year cost per hire

$70,103

1.46× salary

Per month, year 1: $5,842
Per paid hour: $33.70
Per year from year 2: $61,423

Salary$48,000
Payroll taxes and workers' comp$4,383
Benefits$9,040
Recruiting and onboarding$3,880
Ramp-up time$4,800

Line-by-line breakdown

First-year cost, line by line
Salary	$48,000
Social Security (6.2%)	$2,976
Medicare (1.45%)	$696
FUTA	$42
State unemployment	$189
Workers' comp	$480
Health insurance	$7,000
Retirement match	$1,440
Other benefits	$600
Job ads	$400
Agency fee	$0
Background checks	$80
Interview time	$900
Equipment and software	$1,500
Training and onboarding	$1,000
Ramp-up time	$4,800
First-year total	$70,103

Estimate only. Not tax, legal or financial advice.

How the first-year cost is worked out

The calculator adds five things: the salary; the employer's payroll taxes and workers' comp; benefits; the one-time cost of recruiting and onboarding; and the work not yet done while the new hire gets up to speed (the salary for the ramp-up months, times the share of output lost). From the second year only the salary, taxes and benefits repeat.

With the example figures — a $48,000 salary, a 2.7% state unemployment rate on a $7,000 wage base, 1% workers' comp, $7,000 of health insurance and a 3% retirement match — the first year costs $70,103, which is 1.46× the salary, and each later year $61,423.

Important: please read

This free calculator gives an estimate only. It is not tax, legal, accounting or financial advice, and MadyHR.ai is not a law firm, accountant or tax adviser.

MadyHR.ai accepts no responsibility for any decision made using these results. Always check your figures with a qualified professional and the official sources linked on this page.

Federal rates are for the 2026 tax year. State unemployment rates, wage bases and workers' comp rates differ by state, industry and employer, so enter your own.

Not included: state disability or paid leave programs, local payroll taxes, overtime, bonuses, the employee's own tax withholding, or any tax credits you may qualify for.

This page works in your browser only. Nothing you enter is saved or sent anywhere.

Sources

Social Security Administration — Contribution and benefit base. The 2026 Social Security wage base, $184,500
IRS Topic 751 — Social Security and Medicare withholding rates. The employer's 6.2% Social Security and 1.45% Medicare
IRS Topic 759 — Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. FUTA at 6.0% on the first $7,000, and the credit of up to 5.4%
U.S. Department of Labor — FUTA credit reductions. The states whose employers get a smaller FUTA credit
U.S. Department of Labor — Unemployment insurance tax topic
U.S. Department of Labor — Unemployment insurance tax information (fact sheet). How state unemployment tax rates and wage bases are set
U.S. Department of Labor — Workers' compensation

Last reviewed: October 15, 2026. This tool is not an official government calculator, and it is not tax, legal, payroll or financial advice.

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