Computed from the Bureau of Labor Statistics’ June 2026 averages, employer costs for full-time private-industry workers come to about 1.31 times salary, with paid leave counted inside the salary. Those averages come from BLS’s Employer Costs for Employee Compensation survey, or ECEC. The first year adds one-time costs that ECEC does not measure. Recruiting is one. Training is another.
Quick answer
The load is 30.5% on BLS’s June 2026 averages for full-time private-industry workers: about 1.31 times salary, with paid leave counted inside the salary. Year one adds costs outside ECEC’s categories: recruiting, at a 20% agency fee or a flat $9,900, and training. A 2019 SBA blog post’s list of employer costs includes initial training.
Key takeaways
- By establishment size, part-time workers included, the June 2026 multiplier runs from 1.25 to 1.36.
- Dividing total compensation by wages gives 1.43 for all private industry, a ratio that counts paid leave twice when applied to a salary figure that already covers it.
- Computed from KFF’s 2025 averages, an employer’s share of a family health premium is $20,143, about twice ECEC’s average insurance line in the accountant example below.
- For an accountant at the May 2025 median for accountants and auditors, a 20% agency fee brings year one’s sourced lines to about 1.5 times salary, before training.
How much does an employee cost on top of salary in the US?
BLS puts the June 2026 employer cost for full-time private-industry workers at $54.00 per hour worked: $36.97 in wages and salaries and $17.03 in benefits. Paid leave sits inside those benefits, at $4.40.
BLS’s Handbook of Methods (last modified 2025-09-30) counts paid leave as one of five benefit categories and measures every cost per hour worked, with leave hours excluded from hours worked. Pay for vacation and holidays therefore lands in ECEC’s paid-leave column, not its wages column. The Department of Labor’s Vacation Leave page, as of October 2026, says the Fair Labor Standards Act “does not require payment for time not worked,” and calls such benefits “matters of agreement between an employer and an employee.”
This article counts that leave pay inside the salary. On that method, the load on salary is benefits other than paid leave divided by wages plus paid leave: (17.03 − 4.40) ÷ (36.97 + 4.40) = 12.63 ÷ 41.37, or 30.5%. As a multiplier, that is 1.31. Dividing all benefits by wages instead gives 46.1% (17.03 ÷ 36.97). Applied to a salary figure that already covers paid leave, that larger ratio counts the leave twice.
For full-time workers in June 2026, the 30.5% breaks down like this, as rounded shares of salary:
- Supplemental pay, 5.7%. BLS’s definition covers overtime and premium pay, shift differentials and nonproduction bonuses.
- Insurance, 11.1%. BLS’s category covers life, health and disability insurance.
- Retirement and savings, 4.7%. BLS includes both defined benefit and defined contribution plans.
- Legally required benefits, 9.1%. BLS’s Handbook of Methods (2025-09-30) defines these as Social Security, Medicare, federal and state unemployment insurance, and workers’ compensation.
Each figure is an average. BLS’s Handbook of Methods (2025-09-30) says all workers are included in benefit cost estimates, including those without plan access and those who do not participate. Its ECEC Questions and Answers page (2026-02-24) adds that “not all employers offer the same employee benefits.”
One flat fee per US hire: $9,900.
Does a salary-multiple rule of thumb still describe what an employee costs?
A 2019 SBA blog post by Barbara Weltman cites a rule of thumb that an employee’s cost is “typically 1.25 to 1.4 times the salary.” Its worked illustration puts a $35,000 salary at $43,750 to $49,000 in actual costs. The post presents the range as a rule of thumb.
Run June 2026 ECEC through the same method as above, and the averages by establishment size come to 1.25 for 1–49 workers, 1.26 for 50–99, 1.29 for 100–499 and 1.36 for 500 or more. By occupation group, the June 2026 averages give 1.30 for management, business and financial occupations, 1.28 for professional and related occupations and 1.31 for office and administrative support.
The smallest size class lands on the rule’s low end. BLS counts establishment size at the establishment, which in private industry is usually a single physical location rather than a whole company. Across all private industry, no size class reaches 1.4 on this method; the highest is 1.36. None of the three occupation groups reaches it either.
Dividing total compensation by wages gives a different answer: $46.89 ÷ $32.82 = 1.43 for all private industry. That ratio double-counts paid leave the same way. The size and occupation rows cover all workers, part-time included. The 1.31 figure covers full-time workers only, across all establishment sizes combined. BLS’s part-time row shows benefits at 20.0% of compensation, against 31.5% for full-time workers.
| Worker group | Total compensation per hour worked | Wages and salaries | Paid leave | Benefits other than paid leave | Benefits share of compensation (as BLS reports it) | Benefits ÷ wages | Multiplier on salary |
|---|---|---|---|---|---|---|---|
| Full-time workers, every establishment size | $54.00 | $36.97 | $4.40 | $12.63 | 31.5% | 46.1% | 1.31 |
| All private industry | $46.89 | $32.82 | $3.54 | $10.53 | 30.0% | 42.9% | 1.29 |
| Establishments with 1–49 workers | $37.64 | $27.88 | $2.34 | $7.42 | 25.9% | 35.0% | 1.25 |
| Establishments with 50–99 workers | $41.03 | $29.84 | $2.71 | $8.48 | 27.3% | 37.5% | 1.26 |
| Establishments with 100–499 workers | $47.96 | $33.41 | $3.78 | $10.77 | 30.3% | 43.5% | 1.29 |
| Establishments with 500 workers or more | $67.68 | $43.81 | $6.13 | $17.74 | 35.3% | 54.5% | 1.36 |
| Management, business and financial occupations | $88.63 | $59.85 | $8.47 | $20.31 | 32.5% | 48.1% | 1.30 |
| Professional and related occupations | $73.69 | $50.98 | $6.78 | $15.93 | 30.8% | 44.5% | 1.28 |
| Office and administrative support occupations | $36.73 | $25.22 | $2.77 | $8.74 | 31.3% | 45.6% | 1.31 |
How much do employer payroll taxes add on top of salary?
IRS Publication 15 (2026) gives the employer’s 2026 Social Security share as 6.2% of wages up to a $184,500 wage base. The same publication gives the employer’s 2026 Medicare share as 1.45% of all wages, with no wage cap. IRS Topic 759 (updated 2026-09-24) gives FUTA as 6.0% of the first $7,000 of wages, less a credit of up to 5.4% for paying into state unemployment funds, or 0.6% net with the full credit.
A Department of Labor page updated 2026-09-11 says employers in states with an outstanding balance of Title XII advances on January 1 of two or more consecutive years face a reduced FUTA credit if all advances are not repaid before November 10 of the taxable year, and pay “a FUTA tax rate of .6% + FUTA credit reduction.” The same page says the final reduction for a year is not set until Nov. 10 of that year.
The Department of Labor’s Significant Provisions of State Unemployment Insurance Laws, effective July 2026, lists state taxable wage bases from $7,000 to $78,200. The same July 2026 DOL edition lists new-employer base rates such as 2.70% on $9,000 in Texas and 4.025% on $17,600 in New York. DOL’s footnote 4 to the July 2026 edition says the rate shown “is the base rate” and that higher rates may apply depending on industry classification and/or other factors in state law.
The Texas Department of Insurance’s employer resources page, updated 2026-06-08, says private employers in Texas “can choose to carry workers’ compensation insurance coverage,” and that it is not required in most cases. Oregon’s Department of Consumer and Business Services compares states with an index: its 2024 study, published June 2025, puts the national median at $1.09 per $100 of payroll, from $0.50 in North Dakota to $2.52 in Hawaii. Oregon says those index rates “are not, strictly speaking, the premium rates paid by employers” in a state. The index uses 53 NCCI class codes, weighted to Oregon’s own payroll mix.
| Item | Employer rate | Wage base | Source and its date |
|---|---|---|---|
| Social Security, employer share | 6.2% | $184,500 | IRS Publication 15 (2026) |
| Medicare, employer share | 1.45% | All wages, no cap | IRS Publication 15 (2026) |
| FUTA, gross | 6.0% | $7,000 | IRS Topic 759 (2026) |
| FUTA credit for state unemployment tax paid | Up to 5.4% | $7,000 | IRS Topic 759 (2026) |
| FUTA, net with the full credit | 0.6% | $7,000 | IRS Topic 759 (2026) |
| State unemployment, California, new-employer base rate | 3.40% | $7,000 | DOL Significant Provisions, effective July 2026 |
| State unemployment, Florida, new-employer base rate | 2.70% | $7,000 | DOL Significant Provisions, effective July 2026 |
| State unemployment, Texas, new-employer base rate | 2.70% | $9,000 | DOL Significant Provisions, effective July 2026 |
| State unemployment, New York, new-employer base rate | 4.025% | $17,600 | DOL Significant Provisions, effective July 2026 |
| State unemployment, Washington, new-employer base rate | Industry average (shown as IndAvg%) | $78,200 | DOL Significant Provisions, effective July 2026 |
| Workers’ compensation index, California | $1.86 per $100 of payroll (index, not a premium rate) | — | Oregon DCBS, 2024 premium index rates, as of October 2026 |
| Workers’ compensation index, New York | $1.98 per $100 of payroll (index, not a premium rate) | — | Oregon DCBS, 2024 premium index rates, as of October 2026 |
| Workers’ compensation index, Washington | $1.35 per $100 of payroll (index, not a premium rate) | — | Oregon DCBS, 2024 premium index rates, as of October 2026 |
| Workers’ compensation index, Florida | $1.00 per $100 of payroll (index, not a premium rate) | — | Oregon DCBS, 2024 premium index rates, as of October 2026 |
| Workers’ compensation index, Texas | $0.78 per $100 of payroll (index, not a premium rate) | — | Oregon DCBS, 2024 premium index rates, as of October 2026 |
Take an accountant at BLS’s May 2025 median annual pay for accountants and auditors, $83,680. At the 2026 rates in IRS Publication 15, the employer’s Social Security and Medicare shares on that salary come to $6,401.52. Net FUTA at 0.6% of the first $7,000, per IRS Topic 759, adds $42. The Texas new-employer base rate in DOL’s July 2026 edition, 2.70% on $9,000, adds $243. That is $6,686.52 in all, about 8.0% of salary, before workers’ compensation and before any rate above the base. That is arithmetic on published rates, not a tax bill.
Against that 8.0%, the full-time ECEC load is 30.5% of salary. Its other three columns, insurance (11.1% of salary), supplemental pay (5.7%) and retirement and savings (4.7%), come to 21.4% together. BLS averages each one over workers with and without the benefit. Paid leave is not in that load on this article’s method.
How much does health insurance add, and when does coverage start?
KFF’s 2025 Employer Health Benefits Survey, published 2025-10-22, puts the average annual premium at $9,325 to cover one worker and at $26,993 to cover a family. Covered workers contribute $1,440 and $6,850 on average. Subtracting gives employer shares of $7,885 and $20,143, computed here from KFF’s averages.
KFF’s 2025 survey covered private and non-federal public employers with 10 or more workers. In it, 59% of firms with 10 to 199 workers offer health benefits to at least some of their workers, against 97% of firms with 200 or more. Among covered workers, 68% are in firms where they face a waiting period, and the average among those who face one is 1.8 months. Those are shares of workers, not of employers.
For full-time workers, ECEC’s insurance line is $4.58 per hour worked, or 11.1% of salary on this article’s method, about $9,264 a year at the accountant example’s salary. The employer share computed from KFF’s family averages, $20,143, is about twice that. ECEC’s line also covers life and disability insurance, and it averages in workers without coverage.
| Case | Employer’s annual cost | Share of the example salary | Source |
|---|---|---|---|
| ECEC insurance line, full-time workers ($4.58 ÷ $41.37 per hour worked) | About $9,264 | 11.1% | Computed from BLS ECEC Table 5, June 2026 |
| Employer share, single coverage ($9,325 − $1,440) | $7,885 | 9.4% | Computed from KFF 2025 averages |
| Employer share, family coverage ($26,993 − $6,850) | $20,143 | 24.1% | Computed from KFF 2025 averages |
On timing, 29 CFR 2590.715-2708, as amended June 25, 2014, says a group health plan “must not apply any waiting period that exceeds” 90 calendar days, and that “all calendar days are counted beginning on the enrollment date,” “including weekends and holidays.” The same regulation (29 CFR 2590.715-2708, as amended June 25, 2014) permits an orientation period “only if it does not exceed one month.” That 2014 text of 29 CFR 2590.715-2708 also says that, except as provided in its paragraphs (c)(2) and (c)(3), nothing in the section requires a plan sponsor “to offer coverage to any particular individual or class of individuals.”
What does the first year cost that the multiplier leaves out?
ECEC measures compensation, and in the words of BLS’s ECEC Questions and Answers (2026-02-24), its total benefit costs consist of five major categories that “include 18 benefit costs.” Recruiting and training are not among the categories BLS names. The multiplier counts neither.
Staffing Industry Analysts research, as cited by SPECTRAFORCE (May 14, 2025) puts the most common direct-hire fee at 20% of first-year salary. On the accountant’s salary, that fee is $16,736. Flat Fee Direct Hire charges a flat $9,900 per hire for any full-time role up to Director level. For a US role paid under $49,500, an agency charging 20% costs less.
Flat fee or percentage?
Latin America hire: a flat $3,500 versus 25% of salary. The flat fee costs less above a $14,000 salary; below it, the percentage costs less.
US hire: a flat $9,900 versus 20% of salary. The flat fee costs less above a $49,500 salary; below it, the percentage costs less.
SBA’s 2019 post lists “the cost of initial and ongoing training” among an employer’s costs, with no figure given. The same 2019 post lists the cost of recruitment, “including background checks and drug testing where applicable,” as an employer cost too. Your hours, your hourly cost and your own quotes for anything else the hire needs fill in the rest.
Can the first year cost less in benefits than later years?
Yes, where an employer’s plans delay eligibility. The health waiting-period limit above is one federal rule on that timing. Retirement plans have their own.
The IRS’s “A guide to common qualified plan requirements,” last reviewed or updated 2026-08-01, says that, in general, a plan cannot require, as a condition of participation, service extending beyond the later of age 21 or one year of service (Code section 410(a)(1)). The same IRS guide (2026-08-01) says a plan is not qualified unless an employee who is otherwise eligible under its terms starts participating no later than the earlier of two dates: the first day of the first plan year beginning after the employee meets those requirements, or 6 months after the employee meets them (Code section 410(a)(4)). Under those rules, as the IRS guide (2026-08-01) states them, a plan that requires a year of service can start retirement participation in year two.
BLS says ECEC should be used for information about “average compensation in the economy at a point in time.” It is an economy-wide average, not a forecast for one hire. In the worked example below, the year-two column holds the salary and the ongoing load only. Its salary line is whatever pay you set; the ECEC averages carry no raise.
What is a realistic first-year budget when you hire an employee in the US?
The accountant example uses the May 2025 median of $83,680. Applying the unrounded full-time load (12.63 ÷ 41.37) to that salary gives $25,547 a year in ongoing employer costs. Year two, on those lines, is $83,680 + $25,547 = $109,227. On the agency path, year one adds the $16,736 fee for $125,963 before training and your other lines, about 1.5 times salary. On the flat-fee path, year one’s sourced lines are $109,227 plus $9,900.
| Line | Year one | Year two | Source or method |
|---|---|---|---|
| Salary | $83,680 | $83,680, plus any raise you set | BLS median annual pay, accountants and auditors, May 2025 |
| Ongoing employer costs | $25,547 | $25,547 | 30.5% load computed from BLS ECEC Table 5, full-time workers, June 2026 |
| Recruiting | $16,736 at 20%, or $9,900 flat | — | Agency rate: Staffing Industry Analysts research, as cited by SPECTRAFORCE (May 14, 2025); flat fee: Flat Fee Direct Hire |
| Training and onboarding | Your hours × your hourly cost | — | Training is listed as an employer cost in SBA’s 2019 post |
| Other one-time costs | Your quotes | — | Your quotes |
| Sourced subtotal | $125,963 on the agency path; $109,227 plus $9,900 on the flat-fee path | $109,227 | Salary plus ongoing costs plus recruiting |
| Multiple of salary | About 1.5 on the agency path | 1.31 | Sourced subtotal ÷ salary |
How does the first year compare for a hire in Latin America?
Every figure above comes from US sources on US employment costs. Flat Fee Direct Hire’s Latin America fee is $3,500 per hire. You hire the person directly, as a contractor or through an employer of record (EOR) you choose. We are not the employer, the payroll provider or the EOR.
Frequently asked questions
How much does an employee cost on top of salary in the US?
About 30.5% on top of salary for full-time private-industry workers, a multiplier of 1.31, on BLS’s June 2026 averages with paid leave counted inside the salary. Year one adds one-time costs such as recruiting and training.
How do you calculate the true cost of an employee?
Multiply the salary by the multiplier, then add the first year’s recruiting and training costs. Add anything else the hire needs. On BLS’s June 2026 full-time averages, the multiplier is 1 + (17.03 − 4.40) ÷ (36.97 + 4.40), about 1.31.
Does SBA’s salary-multiple rule of thumb still hold?
A 2019 SBA blog post cited a rule of thumb that the cost is typically 1.25 to 1.4 times salary, depending on certain variables. On June 2026 ECEC, the establishment-size averages run from 1.25 to 1.36, part-time workers included, so none reaches 1.4.
Is a recruiting fee part of the cost of an employee?
Recruiting is not among the benefit categories BLS names for ECEC, so the multiplier leaves it out. SBA’s 2019 post lists recruitment among an employer’s costs. In the worked example, a 20% agency fee on the accountant’s salary is $16,736, against a flat $9,900 from Flat Fee Direct Hire.
Does an employee cost less in the second year than in the first?
In the worked example, the year-two column holds the salary and the ongoing load, $109,227, plus any raise you set. The year-one column also includes recruiting and training. Your other one-time costs go there too.
Sources & methodology
- U.S. Bureau of Labor Statistics — Employer Costs for Employee Compensation, Table 5: private industry workers by bargaining and work status, June 2026 (2026-09-09)
- U.S. Bureau of Labor Statistics — Employer Costs for Employee Compensation, Table 6: private industry workers by establishment size and industry group, June 2026 (2026-09-09)
- U.S. Bureau of Labor Statistics — Employer Costs for Employee Compensation, Table 4: private industry workers by occupational and industry group, June 2026 (2026-09-09)
- U.S. Bureau of Labor Statistics — Handbook of Methods, Employer Costs for Employee Compensation: Concepts (2025-09-30)
- U.S. Department of Labor — Vacation Leave (undated, retrieved 2026-10-06)
- U.S. Bureau of Labor Statistics — ECEC Questions and Answers (2026-02-24)
- U.S. Small Business Administration blog — How Much Does an Employee Cost You? (2019-08-22)
- Internal Revenue Service — Publication 15 (2026)
- Internal Revenue Service — Topic 759, FUTA tax (2026-09-24)
- U.S. Department of Labor, Employment and Training Administration — FUTA Credit Reductions (2026-09-11)
- U.S. Department of Labor, Employment and Training Administration — Significant Provisions of State Unemployment Insurance Laws, effective July 2026 (undated, retrieved 2026-10-06)
- Texas Department of Insurance, Division of Workers’ Compensation — Employer resources (2026-06-08)
- Oregon Department of Consumer and Business Services — Oregon Workers’ Compensation Premium Rate Ranking, Calendar Year 2024 (2025-06)
- Oregon Department of Consumer and Business Services — 2024 Workers’ compensation premium index rates (undated, retrieved 2026-10-06)
- U.S. Bureau of Labor Statistics — Accountants and Auditors, median annual pay, May 2025 (2026-08-27)
- KFF — 2025 Employer Health Benefits Survey (2025-10-22)
- Legal Information Institute, Cornell Law School — 29 CFR § 2590.715-2708, text of the regulation (2014-06-25)
- SPECTRAFORCE — How Much Do Staffing Agencies Charge for Direct Hire? (2025-05-14)
- Internal Revenue Service — A guide to common qualified plan requirements (2026-08-01)
Multipliers are one plus total benefits minus paid leave, divided by wages and salaries plus paid leave, using BLS costs per hour worked; employer health-premium shares are KFF’s average premiums minus average worker contributions; every other derived figure is arithmetic on the rates and salary shown.
Figures last verified: 2026-10-07