How Much Does It Cost to Hire an Employee in Colorado? (2026)
State-specific payroll taxes, workers' comp, and total employer costs in Colorado.
Hiring a $60,000/year employee in Colorado costs employers approximately $65,956 total in 2026, including $5,956 in mandatory payroll taxes, workers' comp, and state-mandated insurance. That's a 1.1x multiplier on base salary.
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Total Cost at $60K Salary
$65,956
Cost multiplier: 1.1x
SUTA Rate (Mid)
1.7%
Wage base: $30,600
Workers' Comp Rate
0.89%
Has state income tax
Key Insight
For a $60,000 salary in Colorado, employers pay $5,956 in mandatory taxes — a 1.1x cost multiplier. Colorado's SUTA rate (1.7%) is at the national average of 1.70%.
Model your specific hire
Use our interactive calculator pre-loaded with Colorado's tax rates. Adjust salary, benefits, and overhead to get your true cost.
Colorado Employer Tax Details
State-specific payroll obligations for employers
| SUTA Rate Range | 0.64% – 5.11% |
| SUTA New Employer Rate (typical) | 1.7% ↓ 0.15% from 2025 |
| SUTA Wage Base | $30,600 |
| Workers' Compensation (avg) | 0.89% of payroll ↓ 0.02% from 2025 |
| State Income Tax | Yes |
| Paid Family Leave (employer share) | 0.45% |
FAMLI program: 0.45% employer share.
2026 Rate Changes in Colorado
- ↓ SUTA rate decreased from 1.85% (2025) to 1.7% (2026) — a 0.15% reduction, saving $46 per $60K employee.
- ↓ Workers' comp rate decreased from 0.91% (2025) to 0.89% (2026) — saving approximately $12 per $60K employee per year.
Rate changes reflect Colorado #{TaxConstants::TAX_YEAR} announcements vs. 2025 baseline. Workers' comp rates are industry averages and vary by classification code.
Example Employer Costs in Colorado
Mandatory employer taxes only (no benefits or overhead)
| Component | $40,000 Salary | $60,000 Salary | $80,000 Salary |
|---|---|---|---|
| Social Security (6.2%) | $2,480 | $3,720 | $4,960 |
| Medicare (1.45%) | $580 | $870 | $1,160 |
| FUTA | $42 | $42 | $42 |
| SUTA (CO) | $520 | $520 | $520 |
| Workers' Comp | $356 | $534 | $712 |
| State Programs (DI/PFL) | $180 | $270 | $360 |
| Total Employer Taxes | $4,158 | $5,956 | $7,754 |
| Total Cost (salary + taxes) | $44,158 (1.1x) | $65,956 (1.1x) | $87,754 (1.1x) |
These estimates include mandatory employer payroll taxes only. Add benefits ($7K-$17K) and overhead (~10% of salary) for full cost.
Tax rates sourced from IRS Publication 15, SSA COLA notices, and Colorado Department of Labor. Social Security tax is 6.2% of wages up to $184,500. Medicare is 1.45% with no wage cap. FUTA is 0.6% on the first $7,000 after credit.
How Colorado Compares
Colorado's typical SUTA rate of 1.7% is in line with the national average of ~1.70%. However, with a wage base of $30,600, which is well above the federal minimum of $7,000, the effective SUTA cost per employee can be significant.
Workers' compensation at 0.89% of payroll is below the national average of ~1.20%.
Colorado Employer Environment
Below-average employer costs- State income tax applies — factor into total compensation packages
- SUTA rate 1.7% (wage base $30,600) — in line with national average
- Competitive workers' comp rate (0.89%) — below-average, favorable for labor-intensive businesses
- State paid family leave program (0.45% employer share) — additional mandatory payroll cost
Colorado's overall employer tax burden is broadly in line with the national average. Review SUTA and workers' comp rates relative to your industry classification for a more precise picture.
Colorado Employment Profile
Colorado's FAMLI paid family leave program (employer pays 0.45%) launched in 2024 and adds to a mid-range employer tax profile, offset by a competitive $30,600 SUTA wage base.
aerospace & defense, outdoor recreation, bioscience & healthcare
Denver's growing tech sector competes with California and Texas for talent; employers often supplement base wages with equity or remote-work flexibility to compete.
Cost at Different Salary Levels in Colorado
Total employer cost including all mandatory payroll taxes
Compare Colorado With
Employee Costs in Other States
Hiring Cost by Industry in Colorado
Workers' comp rates vary significantly by industry — restaurant and construction workers cost far more to insure than office staff.
Average Wages by Occupation in Colorado
BLS OEWS 2024Median annual wages from the Bureau of Labor Statistics — use these as your baseline salary when estimating total hiring cost.
| Occupation Group | Median Annual | Employed |
|---|---|---|
| Management | $140,780 | 160,320 |
| Legal | $124,550 | 26,760 |
| Computer and Mathematical | $122,620 | 136,040 |
| Architecture and Engineering | $102,410 | 72,920 |
| Healthcare Practitioners and Technical | $90,530 | 158,890 |
| Business and Financial Operations | $87,110 | 270,120 |
| Life, Physical, and Social Science | $83,100 | 36,440 |
| Arts, Design, Entertainment, Sports, and Media | $62,990 | 42,350 |
States With Similar Hiring Costs
These states have SUTA rates close to Colorado's 1.7% — good for cost benchmarking.
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Simplify Payroll in Colorado
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