Base salary is only one component of what an employee costs. For budgeting and hiring decisions, you need the fully-loaded cost.
Employer cost components
Mandatory costs (required by law): - Social Security: 6.2% on first $168,600 wages - Medicare: 1.45% (uncapped) - FUTA: 0.6% on first $7,000 - State unemployment (SUTA): 0.5–10% depending on state and experience - Workers' compensation: 0.1–10% depending on industry and state
Voluntary benefits (typical US employer): - Health insurance: $5,000–$15,000/year/employee (employer contribution) - Dental/vision: $500–$1,500/year - 401(k) match: 3–5% of salary - Life insurance: $300–$600/year - HSA contribution: $0–$2,000/year
Equipment and overhead: - Laptop and peripherals: $1,500–$3,500 (annualised) - Software licenses (Slack, Zoom, tools): $1,000–$3,000/year - Desk and office space: $3,000–$8,000/year in office; ~$0 remote
Rule of thumb for budgeting
Total employer cost = base salary × 1.25–1.45
For a $100k salary: budget $125k–$145k including all-in costs.
Turnover adds on top
If that employee leaves, add 50–75% of annual salary for replacement cost. A $100k employee who leaves costs another $50k–$75k to replace.
Use the employee turnover cost calculator to model what each departure actually costs your business.