What multiplier should I expect on a salary?

1.25x to 1.4x is the common range for small businesses with modest benefits; rich benefits and equipment push it to 1.5x. If your budget only fits 1.0x, it does not fit the hire.

Employee or contractor for the same work?

Compare true hourly cost against the contractor rate for the actual hours needed. Under ~25 hours a week of steady work, contractors usually win; past that, the employee's lower effective rate and availability flip it. Misclassifying to save the difference is the expensive shortcut.

Does this math apply to hiring myself in my S-corp?

Yes: your reasonable salary carries the same employer payroll taxes, which is exactly why the S-corp comparison tool nets them out of the savings.

Small business

Employee cost calculator

A $60,000 hire does not cost $60,000. Employer payroll taxes, benefits, and equipment stack a multiplier on every salary, and knowing yours is what makes hire-vs-contract decisions honest in both directions.

Your numbers

Currency

Annual salary

The offer on paper.

Benefits

Health, retirement match, PTO value, as percent of salary. 15-30% is the common band.

Equipment and overhead per year

Laptop, software seats, workspace, onboarding.

Results

True annual cost$80,790per year

Multiplier on salary: 1.35x
Employer payroll taxes: $5,790
Benefits: $12,000
Cost per working hour: $38.84

Estimate

workingfigures.com/calculators/employee-cost-calculator

The formula

True cost = salary + employer payroll taxes (~9.65%: FICA plus unemployment approximations) + benefits + overhead. Hourly = true cost ÷ 2,080.

What this ignores

State-specific unemployment rates, workers' comp by industry, recruiting cost, and ramp-up time (a hire produces below capacity for months). The multiplier is a floor.

FAQ

What multiplier should I expect on a salary?: 1.25x to 1.4x is the common range for small businesses with modest benefits; rich benefits and equipment push it to 1.5x. If your budget only fits 1.0x, it does not fit the hire.
Employee or contractor for the same work?: Compare true hourly cost against the contractor rate for the actual hours needed. Under ~25 hours a week of steady work, contractors usually win; past that, the employee's lower effective rate and availability flip it. Misclassifying to save the difference is the expensive shortcut.
Does this math apply to hiring myself in my S-corp?: Yes: your reasonable salary carries the same employer payroll taxes, which is exactly why the S-corp comparison tool nets them out of the savings.