How much does an employee really cost your business? Hourly wage is only part of the picture. This calculator includes payroll taxes, benefits, insurance, and training to show true labor cost and how many sales you need to cover a hire.
How to use this calculator
- Enter hourly wage and hours per week.
- Add payroll tax percentage and monthly benefits, insurance, and training costs.
- Enter average profit per order from your business.
- Review total monthly labor cost and sales needed to cover it.
Formula
Monthly wage = Hourly wage × Hours per week × 52 ÷ 12. Total labor cost adds employer taxes and monthly benefits. Sales needed = Total monthly labor cost ÷ Average profit per order.
Example
A $16/hour employee working 32 hours/week costs about $2,773/month in wages plus $505 in employer add-ons — roughly 728 orders at $4.50 profit each to cover the hire.
Frequently asked questions
- What payroll tax rate should I use?
- Many small businesses use 7–12% as a rough employer payroll cost estimate, but rules vary by location.
- Should I include owner labor?
- This calculator is for employees. Owner time is often tracked separately in small shops and restaurants.