Calculator

Can I afford another employee?

Hire, do not hire, wait until a stated cash threshold, or add overtime instead -- from your own numbers. First the employee cost calculator: what this person actually costs fully loaded, per month and per productive hour, with the employer taxes itemized. Then the decision: whether the hire pays for itself, whether your cash can carry it through the ramp with no new revenue, and whether overtime covers the work for less.

Every field starts blank on purpose. The only numbers this page holds are the federal statutory rates, each cited beside its field and each overridable; state unemployment, workers' comp and benefits have no default because the only true number is the one on your rate notice, your policy, and your plan. The full reasoning, a worked example, and the sources are in the article Employee Cost Calculator: Can You Afford Another Employee? Your numbers stay in your browser; nothing is sent or stored.

1. The role and what you will pay

How will this person be paid?Hourly roles get overtime at time-and-a-half above 40 hours in a workweek (FLSA). Whether a salaried role is exempt from overtime is a legal determination this page does not make.

Hourly rate you will pay requiredThe number on the offer: dollars per hour, or dollars per year if salaried

Paid hours per week requiredScheduled hours. 40 for full time; for a salaried role, the hours you actually expect

Overtime hours per week you expect to pay (hourly roles)Leave blank if none. Counted at 1.5x the rate above

Paid days off per yearHolidays, vacation, sick days. These are paid but not worked; they change the cost per productive hour

Benefits you will pay for, per monthYour share of health insurance, retirement match, life or disability cover. Leave blank if none

Other recurring cost for this person, per yearPhone, vehicle or fuel, tools, uniforms, software seats, training courses, a desk

One-time cost to hire and equipRecruiter or job-ad spend, background check, equipment, onboarding time. Leave blank if none

2. Employer taxes and insurance

The federal rates are filled in for you from the IRS and can be overridden; a blank override means the cited rate is used. State unemployment and workers' comp are yours to enter: no state's figure is pre-filled, because the number on your rate notice and your policy is the only one that is true for you.

Employer Social Security rateDefault 6.2% of wages, employer share (IRS Topic 751, tax year 2026). Override only if you have a reason

Social Security wage baseDefault $184,500 for 2026 (IRS Topic 751); wages above it are not taxed for Social Security

Employer Medicare rateDefault 1.45% of all wages, no cap (IRS Topic 751). The 0.9% Additional Medicare Tax above $200,000 is employee-only and is not an employer cost

Federal unemployment (FUTA) rate after the state creditDefault 0.6%: the 6.0% rate less the 5.4% maximum credit for paying state unemployment tax on time (IRS Topic 759). Employers in a credit-reduction state owe more

FUTA wage baseDefault $7,000 of wages per employee per year (IRS Topic 759)

Your state unemployment insurance rateFrom your state rate notice; a new employer is on the new-employer rate. Blank is treated as zero and flagged

Your state taxable wage baseThe wages per employee your state taxes each year, from the same notice. If blank, the rate above is applied to all wages

Workers' compensation rateFrom your policy: dollars per $100 of payroll for this class of work. Blank is treated as zero and flagged

3. What this person does for the business

These numbers decide whether the hire ever pays. Answer them from work you can name, not from what a good hire might do.

Months until this person is fully productive requiredTraining, licensing, learning your customers. Zero if they produce at full rate from the first week

Share of full output during the rampAs a percentage. Blank means none: nothing is credited until the ramp ends

Cost this hire removes, per month, once productiveOvertime you pay now, a subcontractor or temp agency, hours of your own time you can bill instead

Extra gross profit this hire lets you earn, per month, once productiveNew revenue minus the direct costs of that revenue. Not the revenue itself

Where does that gross-profit number come from?An estimate is fine to enter. It is treated as an estimate.

How many months you expect this workload to lastLeave blank if it is permanent. The number owners most often skip, and the one that decides overtime versus a hire

Longest payback you will accept, in monthsLeave blank for no limit; payback is shown either way

4. Your cash

Cash in the business today requiredOperating accounts, not the line of credit

Your monthly cash flow before this hire requiredWhat the bank balance moves by in a typical month: positive if the business adds cash, negative if it burns it. A minus sign is fine

Monthly outflows you cannot skip requiredPayroll, rent, loan payments, tax set-asides, insurance

Months of those outflows that must stay in the bank requiredYour own rule. The article explains how to pick one if you do not have one

5. The overtime alternative (optional)

Fill this in if the work could be covered by people you already employ working more hours. Overtime is costed at time-and-a-half plus employer Social Security and Medicare; state unemployment and workers' comp on overtime are left out, which makes overtime look slightly cheaper than it is.

Hours per week of work that needs coveringThe hours, not the headcount

Straight-time hourly rate of the people who would work itAverage across the people who would pick up the hours

How the verdict is reached

The fully loaded cost is wages plus the employer's share of Social Security and Medicare, federal and state unemployment tax, workers' compensation, benefits, and the recurring costs that follow a person around; divided by twelve it is the monthly cost, and divided by the hours the person is actually paid to work (not the hours they are paid for) it is the cost per productive hour. Contribution is the cost this person removes plus the gross profit they add once they are up to speed. If contribution is zero, or below the loaded cost, the hire never pays and the answer is do not hire, or overtime if that covers the same work for less. If the contribution depends on an estimate rather than named work, the answer is wait, or overtime while you count. If payback runs past your limit, do not hire. If the load is short, or overtime is cheaper for its length, add overtime instead. Then the cash question: with no new revenue at all, the hire drains its loaded cost less whatever the business already adds each month, for every month of the ramp; that amount plus the one-time cost plus your floor is the cash threshold, and if you are under it, wait until you reach it. Last, the downside: if the new work comes in at half, can the cash above your floor carry six months of the shortfall.

Sources for the statutory rates

Internal Revenue Service, Tax Topic 751, Social Security and Medicare withholding rates: employer share 6.2% and 1.45%; 2026 Social Security wage base $184,500; Additional Medicare Tax 0.9% is employee-only. Page updated 2026-01-20; read 2026-09-12.
Internal Revenue Service, Tax Topic 759, Form 940 and FUTA: 6.0% on the first $7,000 of wages per employee; maximum credit 5.4%; net 0.6%. Page updated 2026-02-25; read 2026-09-12.
U.S. Department of Labor, Employment and Training Administration, Significant Provisions of State Unemployment Insurance Laws, effective January 2026: every state's taxable wage base and new-employer rate. Your state's rate notice is the figure that applies to you.
29 U.S.C. 207(a)(1), Fair Labor Standards Act: overtime at not less than one and one-half times the regular rate for hours over forty in a workweek, for non-exempt employees.

This calculator is informational and does not constitute financial, legal, or tax advice. It uses the numbers you enter plus the cited federal statutory rates; it holds no benchmark wages, no state figures, and no insurance rates. Whether a worker is an employee, and whether they are exempt from overtime, are legal determinations it does not make. Consult a qualified professional for decisions specific to your situation.