Your Hiring Calculator
$0True Annual Cost
$0Monthly Burden
$0Revenue Break-Even
Cost Breakdown
| Cost Component | Amount |
|---|---|
| Base Salary | — |
| FICA / Payroll Taxes (7.65%) | — |
| Federal Unemployment (FUTA) | — |
| Workers Compensation (~2%) | — |
| Health Insurance | — |
| Paid Time Off (10 days est.) | — |
| Total Annual Employment Cost | — |
Note: This calculator estimates total hiring costs including payroll taxes, unemployment insurance, and typical benefits. Actual costs vary by location, industry, benefits package, and state regulations. Consult an accountant before making hiring decisions. This is a planning tool, not financial or HR advice.
Frequently Asked Questions
Beyond salary, plan for: FICA payroll taxes (7.65% of wages), federal unemployment tax (FUTA — 6% on first $7,000 of wages), state unemployment taxes (1–5% depending on state), workers compensation insurance (1–5% of payroll depending on industry), health insurance ($6,000–$15,000/year if offered), and paid time off. Total overhead typically adds 25–45% to base salary.
You're ready to hire when: (1) your revenue comfortably covers 12+ months of total employment cost, (2) you're consistently at capacity and losing revenue by not having help, and (3) the value created by the hire exceeds their total cost. A common rule: your business should be generating 3x the employee's total cost before hiring.
Contractors cost more per hour but have zero overhead — no payroll taxes, benefits, or workspace. For irregular or specialized work, contractors are often more cost-effective. For consistent 30+ hours/week of ongoing work, employees become more economical. Note: misclassifying employees as contractors carries serious IRS penalties.
Employers pay: Social Security (6.2% on wages up to $184,500 in 2026), Medicare (1.45% on all wages), Federal Unemployment/FUTA (6% on first $7,000 of wages, often reduced to 0.6% with state tax credit), plus state-specific unemployment insurance and any applicable state payroll taxes.
A $50,000 salary employee costs approximately $62,500–$72,500/year all-in. At a standard 33% profit margin, you'd need to generate $187,500–$217,500 in revenue to cover this hire. More practically: you should see $60,000–$90,000/year in additional revenue from the work this person enables — whether by freeing your time or directly generating sales.
Beyond base salary, add 25-40% in employer costs: FICA match (7.65%), FUTA, state unemployment, workers comp, health insurance ($667-$1,583/mo), plus equipment. A $50K salary employee typically costs $62K-$70K annually all-in.
A common rule: generate at least 3x the total employee cost before hiring. If a hire costs $65,000/year all-in, you want $195,000+ in annual revenue and evidence the hire will generate more -- not just maintain current output.