Formula
Wages are the headcount times average gross pay. The burden is a percent of those wages:
Payroll cost = employees × average gross pay × (1 + employer burden)
Use the same period for the gross pay and the result. The example is one month.
Assumptions
- Every employee is paid the average gross amount.
- The burden percent covers the employer taxes and benefits you choose to include.
Worked example
12 employees at $4,000.00 gross with a 15% burden cost $55,200.00.
Input definitions
- Average gross pay
- Pay before the employee’s own deductions, for the period you have in mind.
- Employer burden
- A percent added on top of wages. It is not an income-tax withholding table.
Limitations
This is a planning estimate, not accounting, tax, payroll, or advertising advice. The currency control changes the symbol only.
Questions
How do I price one employee with benefits listed separately?
Use the employee cost calculator. This page uses one average and one percent.
Is the burden withheld from the employee?
No. It is an extra cost to the employer, on top of gross pay.