How Much Does It Cost to Hire an Employee in Minnesota? (2026)
State-specific payroll taxes, workers' comp, and total employer costs in Minnesota.
Hiring a $60,000/year employee in Minnesota costs employers approximately $65,978 total in 2026, including $5,978 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
$65,978
Cost multiplier: 1.1x
SUTA Rate (Mid)
1.0%
Wage base: $44,000
Workers' Comp Rate
1.18%
Has state income tax
Key Insight
For a $60,000 salary in Minnesota, employers pay $5,978 in mandatory taxes — a 1.1x cost multiplier. Minnesota's SUTA rate (1.0%) is below the national average of 1.70%.
Model your specific hire
Use our interactive calculator pre-loaded with Minnesota's tax rates. Adjust salary, benefits, and overhead to get your true cost.
Minnesota Employer Tax Details
State-specific payroll obligations for employers
| SUTA Rate Range | 0.1% – 9.0% |
| SUTA New Employer Rate (typical) | 1.0% — No change from 2025 |
| SUTA Wage Base | $44,000 |
| Workers' Compensation (avg) | 1.18% of payroll ↓ 0.02% from 2025 |
| State Income Tax | Yes |
| Paid Family Leave (employer share) | 0.33% |
2026 Rate Changes in Minnesota
- — SUTA rate unchanged at 1.0% from 2025 to 2026.
- ↓ Workers' comp rate decreased from 1.2% (2025) to 1.18% (2026) — saving approximately $12 per $60K employee per year.
Rate changes reflect Minnesota #{TaxConstants::TAX_YEAR} announcements vs. 2025 baseline. Workers' comp rates are industry averages and vary by classification code.
Example Employer Costs in Minnesota
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 (MN) | $400 | $440 | $440 |
| Workers' Comp | $472 | $708 | $944 |
| State Programs (DI/PFL) | $132 | $198 | $264 |
| Total Employer Taxes | $4,106 | $5,978 | $7,810 |
| Total Cost (salary + taxes) | $44,106 (1.1x) | $65,978 (1.1x) | $87,810 (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 Minnesota 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 Minnesota Compares
Minnesota's typical SUTA rate of 1.0% is below the national average of ~1.70%. However, with a wage base of $44,000, which is well above the federal minimum of $7,000, the effective SUTA cost per employee can be significant.
Workers' compensation at 1.18% of payroll is below the national average of ~1.20%.
Minnesota Employer Environment
Below-average employer costs- State income tax applies — factor into total compensation packages
- Low SUTA rate (1.0% on $44,000 wage base) — below-average unemployment insurance cost
- Workers' comp rate 1.18% — near national average, varies by industry classification
- State paid family leave program (0.33% employer share) — additional mandatory payroll cost
Minnesota's below-average SUTA and competitive workers' comp rates translate to a meaningful cost advantage per employee compared to the national norm, particularly for labor-intensive businesses.
Minnesota Employment Profile
Minnesota requires employers to contribute to both SUTA (on a $44,000 wage base) and a 0.33% paid family leave program, creating one of the higher employer tax burdens in the Midwest.
healthcare & medical devices (Medtronic), retail (Target, Best Buy), food processing (General Mills)
Minnesota's generous paid family leave program (24 weeks total) is a competitive recruiting tool that many Fortune 500 headquarters use to attract talent from lower-benefit states.
Cost at Different Salary Levels in Minnesota
Total employer cost including all mandatory payroll taxes
Compare Minnesota With
Employee Costs in Other States
Hiring Cost by Industry in Minnesota
Workers' comp rates vary significantly by industry — restaurant and construction workers cost far more to insure than office staff.
Average Wages by Occupation in Minnesota
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 | $122,230 | 200,060 |
| Computer and Mathematical | $102,590 | 97,460 |
| Legal | $101,560 | 20,750 |
| Healthcare Practitioners and Technical | $95,380 | 187,480 |
| Architecture and Engineering | $92,340 | 57,950 |
| Business and Financial Operations | $82,220 | 208,210 |
| Life, Physical, and Social Science | $78,590 | 32,150 |
| Construction and Extraction | $69,800 | 114,050 |
States With Similar Hiring Costs
These states have SUTA rates close to Minnesota's 1.0% — good for cost benchmarking.
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Simplify Payroll in Minnesota
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