Employer cost calculator: what an employee really costs, and what they take home

The cost of an employee in six numbers

• 15% above £5,000 UK employer National Insurance in 2026/27: 15% of everything above the £5,000 secondary threshold, the single biggest add-on to a British salary. On £30,000 that is £3,750.
• 3% minimum pension UK auto-enrolment: the employer pays at least 3% of qualifying earnings (£6,240 to £50,270), the employee at least 5%. The qualifying band and the £10,000 trigger are frozen for 2026/27.
• £10,500 Employment Allowance Most UK employers can knock £10,500 a year off their total employer NI bill. For a first hire on £30,000 it wipes the employer NI out completely.
• 7.65% employer FICA US employers match the employee's Social Security (6.2%, up to $184,500 of wages in 2026) and Medicare (1.45%, no cap). Then come FUTA, state unemployment and workers' comp.
• $16,100 standard deduction The 2026 federal standard deduction for a single filer ($32,200 married filing jointly), after which the seven brackets from 10% to 37% apply. A $60,000 single earner in Texas pays $5,020 of federal income tax.
• 1.25 to 1.4 times salary The US rule of thumb for a fully loaded employee once health insurance and a 401(k) match are included; in the UK the statutory add-ons alone come to about 1.15 times. Benefits, not taxes, make the American number bigger.

United States: what sits on top of the salary

American payroll taxes are lower than European contributions, but benefits are mostly private and paid by the employer, which is why a fully loaded US employee costs 1.25 to 1.4 times their salary. The calculator separates the two: taxes are automatic, benefits are yours to fill in.

1. 1

   Start from the annual salary

   US pay is quoted per year and paid biweekly or semi-monthly; there is no thirteenth month. Exempt (salaried) employees have no overtime; non-exempt employees are paid 1.5 times above 40 hours a week. The federal minimum wage is still $7.25, but 30 states and most cities set higher floors.

2. 2

   Add employer FICA

   The employer matches the employee's Social Security tax (6.2% of wages up to $184,500 in 2026) and Medicare tax (1.45%, no limit). 7.65% in total on most salaries, $4,590 on $60,000. The 0.9% Additional Medicare tax above $200,000 is employee-only.

3. 3

   Add unemployment taxes and workers' comp

   FUTA, the federal unemployment tax, is 6.0% on the first $7,000 of each employee's wages, but the 5.4% credit for paying state tax brings it to 0.6%, $42 a year (2.1% in California while its credit reduction lasts). State unemployment (SUTA or SUI) applies the state's new-employer rate to its taxable wage base: 2.7% on $9,000 in Texas, 3.4% plus 0.1% training tax on $7,000 in California, 4.1% on $17,600 in New York. Workers' compensation insurance is mandatory almost everywhere and priced by job class, from about 0.3% of pay for office staff to 5% and more in construction.

4. 4

   Add the benefits

   Health insurance is the big one: in 2025 employers paid on average $7,885 a year toward single coverage and about $20,100 toward family coverage (KFF). A 401(k) match of 3% to 5% is standard in salaried jobs. Paid time off has no federal minimum but 10 to 15 days is typical, and some states (California, New York, New Jersey, Washington, Massachusetts) add paid family or disability leave contributions.

employer cost = salary + FICA 7.65% + FUTA 0.6% × $7,000 + SUTA rate × state wage base + workers' comp % × salary + health insurance + 401(k) match + other costs

Example: $60,000, single, Texas, office work, no benefits. Employer FICA $4,590, FUTA $42, Texas unemployment $243, workers' comp $180: an employer cost of $65,055, 1.08 times the salary. Add the average single health plan ($7,885) and a 4% match ($2,400) and the cost becomes $75,340, 1.26 times. The employee takes home $50,390 a year ($4,199 a month) after $5,020 of federal income tax and $4,590 of FICA; Texas has no state income tax.

How UK take-home pay is calculated

Pay-as-you-earn takes three things from a British payslip before the money lands. First the pension contribution (5% of qualifying earnings in a net pay scheme comes off before tax; under relief at source the employee pays 4% and HMRC adds 1%, with the same result for basic-rate taxpayers). Then income tax on everything above the personal allowance of £12,570, which shrinks by £1 for every £2 earned above £100,000 and vanishes at £125,140. Then employee National Insurance: 8% between £12,570 and £50,270 and 2% above. Student loan repayments (9% above the plan's threshold, 6% for postgraduate loans) come last.

Income tax bands 2026/27

Personal allowance £12,570 in both systems, frozen until April 2031. The bands above are on taxable income: £37,700 of taxable income is £50,270 of salary. National Insurance is identical across the UK.

Leave is inside the cost

A full-time employee works about 260 weekdays a year but is paid for all of them, holidays included. In the UK that means at least 5.6 weeks (28 days including bank holidays) of statutory paid leave: on a £34,563 employer cost, one working day is worth £133 and the year's holiday about £3,700, and untaken leave carries over as a liability on the books. In the US there is no federal paid-vacation law, but 10 to 15 days is standard and accrued PTO must be paid out on leaving in many states. Either way, knowing exactly who is off and how many days each person has left is cost management, not admin. That is what Bueggio HR does.

Frequently asked questions