Midwest Employee Cost by State (2026)
State-by-state employer payroll costs across the Midwest at all salary levels. Regional averages, state rankings, and key cost drivers.
Hiring a $60,000/year employee in the Midwest costs employers an average of $65,560 in 2026 — 0.4% below the national average of $65,802. The lowest-cost state is Indiana ($65,285) and the highest is Minnesota ($65,978).
The Midwest offers a moderate employer cost environment. While most states lack supplemental programs like disability insurance, SUTA rates and workers' compensation costs vary significantly — with Minnesota and Wisconsin on the higher end and states like Iowa and Missouri more competitive.
Regional Average at $60K
$65,560
Across 12 states
Lowest-Cost State
Indiana
$65,285 at $60K
Highest-Cost State
Minnesota
$65,978 at $60K
Midwest is 0.4% below the national average
National average at $60K salary: $65,802. The Midwest average is $65,560 — a difference of $242/year per employee.
Regional Average Employer Cost by Salary Level
What employers in the Midwest pay on average at each salary tier (includes all mandatory taxes)
| Salary | Midwest Avg | National Avg | Overhead Cost | Multiplier |
|---|---|---|---|---|
| $30,000 | $32,900 | $33,027 | +$2,900 | 1.1x |
| $40,000 | $43,795 | $43,964 | +$3,795 | 1.09x |
| $50,000 | $54,682 | $54,890 | +$4,682 | 1.09x |
| $60,000 benchmark | $65,560 | $65,802 | +$5,560 | 1.09x |
| $75,000 | $81,877 | $82,153 | +$6,877 | 1.09x |
| $100,000 | $109,071 | $109,392 | +$9,071 | 1.09x |
| $125,000 | $136,265 | $136,630 | +$11,265 | 1.09x |
| $150,000 | $163,460 | $163,867 | +$13,460 | 1.09x |
Midwest States Ranked by Employer Cost
Cheapest to most expensive at $60K salary
| Rank | State | $30K | $50K | $60K | $75K | $100K | $150K | Multiplier | |
|---|---|---|---|---|---|---|---|---|---|
| #1 | Indiana | $32,735 | $54,435 | $65,285 | $81,560 | $108,685 | $162,935 | 1.088x | Full breakdown → |
| #2 | Ohio | $32,748 | $54,474 | $65,337 | $81,632 | $108,789 | $163,104 | 1.089x | Full breakdown → |
| #3 | Missouri | $32,754 | $54,502 | $65,376 | $81,687 | $108,872 | $163,242 | 1.09x | Full breakdown → |
| #4 | Nebraska | $32,774 | $54,520 | $65,393 | $81,702 | $108,885 | $163,250 | 1.09x | Full breakdown → |
| #5 | Michigan | $32,874 | $54,600 | $65,463 | $81,758 | $108,915 | $163,230 | 1.091x | Full breakdown → |
| #6 | South Dakota no income tax | $32,841 | $54,607 | $65,490 | $81,815 | $109,022 | $163,437 | 1.092x | Full breakdown → |
| #7 | Kansas | $32,894 | $54,634 | $65,504 | $81,809 | $108,984 | $163,334 | 1.092x | Full breakdown → |
| #8 | Iowa | $32,919 | $54,701 | $65,592 | $81,929 | $109,156 | $163,611 | 1.093x | Full breakdown → |
| #9 | Wisconsin | $33,083 | $54,849 | $65,732 | $82,057 | $109,264 | $163,679 | 1.096x | Full breakdown → |
| #10 | Illinois | $33,086 | $54,854 | $65,738 | $82,064 | $109,274 | $163,694 | 1.096x | Full breakdown → |
| #11 | North Dakota | $33,009 | $54,951 | $65,834 | $82,158 | $109,366 | $163,781 | 1.097x | Full breakdown → |
| #12 | Minnesota + mandated programs | $33,090 | $55,062 | $65,978 | $82,352 | $109,642 | $164,222 | 1.1x | Full breakdown → |
Key Findings: Midwest Employer Costs
- The regional average employer cost for a $60K employee is $65,560, 0.4% below the national average of $65,802.
- Indiana is the most cost-effective state for employers at $65,285 per $60K employee (1.088x salary).
- Minnesota has the highest employer costs at $65,978 per $60K employee (1.1x salary).
- South Dakota and Wyoming have no state income tax. SUTA wage bases are moderate. No mandatory disability or paid family leave programs in most states.
- The spread between lowest and highest cost states within the region is $693/year per $60K employee. At a 10-person team, that's a potential difference of $6,930/year.
Compare Other Regions
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