Accounting: Employee Cost Calculator
For every planned new hire, it is important to know in advance what the total cost of employing the person will be. This includes wages, taxes, and employer sponsored benefits expense.
In addition, it is necessary to derive the cost per billable hour (Loaded Hourly Rate) in order to know if this hire will contribute to the company’s profit within its pricing model.
This small worksheet can give the hiring manager the real cost of the candidate being considered to fill an open position:
Key to worksheet updates:
- Update cells B8 to C11 each year with annual tax rates and limits
- For each employee, enter all blue fields including Holiday and PTO days
Use of data:
- Total cost of the employee (cell E24) is used to measure impact on annual Budget/Fcst
- Loaded Hourly Rate allows calculation of contribution margin for setting the billing rate
- Payroll Overhead percentage can be used in general to mark up Salary to full cost