How to build an employer cost estimate
Add contributions and overhead to salary.
1
Start with base salary
Use gross annual salary before any employer costs.
2
Add employer contributions
Apply the local payroll and social contribution rate.
3
Add benefits and overhead
Include insurance, pension, equipment, software and workspace.
What does this tool do?
Headcount costs more than salary. Employer payroll taxes, pension or social contributions, benefits and workspace overhead all add to the real cost of a role, which matters for budgeting and pricing work.
The Formula
Employer cost = Salary + (Salary × Employer contribution rate) + Benefits + OverheadFrequently Asked Questions
What should employer contributions include?
Include mandatory payroll taxes, social security contributions and any employer pension or insurance contributions. Rates differ widely by jurisdiction, so use local figures.
Why divide by 2,080 hours?
2,080 is 40 hours for 52 weeks. Actual productive hours are lower after leave and admin, so the productive cost per hour is higher than this figure.