Hiring Cost Calculator
Thinking about making your first or next hire? This free hiring cost calculator shows the true, fully loaded cost of an employee — not just their salary, but the employer payroll taxes, workers’ compensation, and benefits that come with them. It also estimates how the hire changes your working capital: the recurring cash that leaves your account every pay period, and the cash buffer a small business should keep on hand to make payroll on time. Adjust the wage, pay frequency, tax rates, and benefits to model your exact situation.
How the hiring cost calculator works
Enter a salary or hourly wage and the calculator adds the employer side of payroll: Social Security (6.2% up to $184,500 in 2026), Medicare (1.45% with no cap), federal unemployment (FUTA, 0.6% on the first $7,000), and your state unemployment (SUTA) rate. Layer in workers’ compensation, a 401(k) match, and health insurance to see the total annual cost, the cost per pay period, and what it means for the cash you need to hold.
Frequently asked questions
What is the true cost of hiring an employee?
Beyond gross wages, an employer pays Social Security, Medicare, FUTA and SUTA payroll taxes, and usually workers’ compensation and benefits. Together these typically push the fully loaded cost to roughly 1.2 to 1.4 times the base wage.
What payroll taxes does an employer pay in 2026?
In 2026, employers pay 6.2% Social Security on the first $184,500 of wages, 1.45% Medicare with no cap, and 0.6% net FUTA on the first $7,000, plus a state unemployment (SUTA) rate that varies by state.
How much cash should I set aside before hiring?
A common rule of thumb is to keep two to three months of the new hire’s fully loaded payroll in reserve before their start date, on top of your existing cash, so you can cover payroll during slow sales months.
How does hiring affect working capital?
A new hire adds a fixed, recurring cash outflow every pay period, whether or not your customers have paid you yet. That raises the minimum cash balance your business needs to operate safely.
Does this calculator work outside Pittsburgh?
Yes. The federal payroll taxes apply nationwide, and you can edit the SUTA rate, wage base, and workers’ compensation percentage for Pennsylvania or any other state.
More free tools for small businesses
Part of YinzMart’s free toolkit for Pittsburgh small businesses:
- Paid Parental Leave Cost Calculator — model the cash-flow impact of a full-pay parental leave.
- Credit Card Processing Fee Calculator — compare seven card processors and find the cheapest swipe.
- Income Statement Calculator — build a live profit-and-loss and stress-test a season.
- Retail Store Break-Even Calculator — see whether a storefront’s numbers work before you sign a lease.