What is the average cost per employee in the US?

The average cost per employee is roughly 1.25x–1.4x their base salary. For a $60,000 salary, total employer cost typically runs $75,000–$84,000 after FICA (7.65%), FUTA ($42), SUTA (2–5% depending on state), workers' compensation (0.5–4%), and basic benefits like health insurance and PTO. The exact figure depends heavily on state and industry — California and New York run $5,000–$8,000 higher than Texas or Florida on the same salary.

What are the cheapest states for payroll taxes?

The lowest-cost states for employer payroll taxes are generally South Dakota, Wyoming, Florida, Texas, and Nevada — all have no state income tax and low SUTA rates. On a $60,000 salary with basic benefits, these states typically add $14,000–$16,000 in total employer overhead vs. $18,000–$24,000 in high-cost states like California, New York, or Washington. The difference comes from SUTA rate and wage base, workers' comp rates, and state-mandated programs like disability insurance and paid family leave.

How does industry affect employee cost?

Industry affects cost primarily through workers' compensation rates. Construction workers carry a 4x higher workers' comp rate than the state average; restaurant workers average 2.5x; office/professional services 0.25x–0.3x. On a $60,000 salary in California, a construction employee costs roughly $3,000–$5,000 more per year than an office worker due to workers' comp alone. Healthcare falls in the middle at roughly 1.4x the state average rate.

How much does it cost to hire an employee at $60,000?

A $60,000 salary costs employers $75,000–$84,000 total with basic benefits, and $83,000–$95,000 with comprehensive benefits. The breakdown: Social Security $3,720 (6.2% on first $184,500), Medicare $870 (1.45%), FUTA $42 (0.6% on first $7,000), SUTA $600–$3,000 depending on state, workers' comp $300–$2,400 depending on state and industry, health insurance $7,200 (basic) or $16,800 (comprehensive), and overhead (equipment, workspace) $6,000–$8,000.

How do I calculate the true cost of an employee?

Start with base salary. Add employer FICA (6.2% Social Security + 1.45% Medicare = 7.65%). Add FUTA (0.6% on first $7,000 = about $42/year). Add SUTA: look up your state's average new employer rate × state wage base. Add workers' compensation: state base rate × industry multiplier × salary. Add benefits: health insurance ($7,500 single coverage average), retirement match (3–6% of salary), PTO (salary ÷ 260 × days), and overhead (equipment, workspace, training — typically 10–15% of salary). Sum everything to get true employer cost.

Employee Cost Calculator

Enter salary, state, and industry to see the true cost of hiring — FICA, SUTA, workers' comp, and benefits. Or compare two states side by side to find where hiring is cheapest.

No signup No tracking Last updated March 2026 Open Methodology →

Quick answer: A $60,000 employee costs roughly $75,000–$84,000/year total — 1.25x–1.40x salary — after FICA (7.65%), SUTA, workers' comp, and basic benefits. High-cost states like California add $5,000–$8,000 more than Texas or Florida on the same salary.

Employee Details

Annual Salary

State

Industry

Adjusts workers' comp rate by industry

Benefits Package

Number of Employees

Select States to Compare

See "What if you hired in Texas instead of California?" — side-by-side breakdown.

State 1

State 2

Cost Component	Annual Cost
Social Security (6.2%)	-
Medicare (1.45%)	-
FUTA (0.6%)	-
SUTA (state unemployment)	-
Workers' Compensation	-
Benefits	-
Health Insurance	-
401(k) Match	-
PTO Cost	-
Equipment & Supplies	-
Overhead & State Programs	-
Overhead (equipment, workspace)	-

Cheapest States for Payroll Taxes (2026)

$60,000 salary, basic benefits, all-industry average. Ranked by total employer cost.

Rank	State	Total Cost	Multiplier	SUTA Rate	Details
1	Virginia	$78,485	1.31x	1.56%	View →
2	Indiana	$78,485	1.31x	1.5%	View →
3	Florida	$78,502	1.31x	1.0%	View →
4	Texas	$78,537	1.31x	1.5%	View →
5	Ohio	$78,537	1.31x	1.3%	View →
6	Kentucky	$78,540	1.31x	1.0%	View →
7	Arizona	$78,562	1.31x	2.0%	View →
8	Missouri	$78,576	1.31x	1.0%	View →
9	Tennessee	$78,585	1.31x	1.5%	View →
10	Nebraska	$78,593	1.31x	1.25%	View →
Source: State unemployment agencies, NCCI, BLS ECEC (2026 rates). SUTA rate is new employer rate.

Most Expensive States for Payroll Taxes (2026)

Same $60,000 baseline — ranked highest to lowest total cost.

State	Total Cost	Multiplier	SUTA Rate	Details
Hawaii	$81,222	1.35x	3.0%	View →
Washington	$80,058	1.33x	1.75%	View →
Oregon	$79,967	1.33x	2.2%	View →
Alaska	$79,966	1.33x	2.0%	View →
Connecticut	$79,905	1.33x	2.9%	View →

How Industry Affects Workers' Comp Cost

Workers' compensation rates vary by 10x+ between the safest and most hazardous industries. These multipliers apply to your state's base workers' comp rate.

Industry	WC Multiplier	Why?	Detailed pages
Construction	4.0x	Falls, heavy equipment, structural hazards	All states →
Restaurant	2.5x	Burns, slips, repetitive strain, lifting	All states →
Manufacturing	3.0x	Machinery, repetitive motion, hazardous materials	All states →
Healthcare	1.4x	Patient handling, needlesticks, back injuries	All states →
Retail	1.3x	Slips, heavy lifting, customer incidents	All states →
Technology	0.25x	Office work, low physical risk	All states →
Professional Services	0.28x	Desk work, minimal injury exposure	All states →

Multipliers are relative to the state average new employer workers' comp rate. Source: NCCI class code loss cost data.

How This Calculator Works

Enter a salary, select a state, and pick an industry. The calculator applies real state-level SUTA rates and wage bases, employer FICA (7.65%), FUTA ($42 flat), workers' comp adjusted by your industry multiplier, and your chosen benefits package. State-specific programs — California SDI, New York DBL, Washington PFML — are included where applicable.

The industry dropdown adjusts the workers' comp rate using verified NCCI loss cost multipliers. A construction worker in the same state with the same salary costs 4× more in workers' comp than an office worker. This matters most in industries with high physical risk.

Use Compare States to run the same salary side by side across two or three states. The winner is automatically identified with total annual savings shown.

Employee Cost by State

Full SUTA rates, workers' comp, DI/PFL programs, and cost breakdown for all 50 states plus DC.

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming

Employee Cost by Industry & State

Industry-specific workers' comp rates, BLS wage data, and cost breakdowns by state.

Construction Restaurant Manufacturing Healthcare Retail Technology Professional Services

Links go to California — change state in the URL to see any state.

Employee Cost Calculator: Common Questions

What is the average cost per employee?

The average cost per employee is 1.25x–1.4x their base salary. For a $60,000 salary, expect $75,000–$84,000 total with basic benefits. This includes employer FICA ($4,590 SS + $870 Medicare), FUTA ($42), SUTA ($600–$3,000 depending on state), workers' comp ($300–$2,400 depending on state and industry), health insurance ($7,200 basic), and overhead ($6,000+). The BLS reports that benefits average 31% of total compensation for private-sector workers.

Which states have the lowest payroll taxes for employers?

South Dakota, Wyoming, and Florida consistently rank among the lowest-cost states for employers. They have low or zero state income tax, low SUTA wage bases, and no mandatory disability insurance or paid family leave programs. Texas and Nevada are also low. On a $60,000 salary, the 10 cheapest states save roughly $4,000–$6,000 per year vs. the 5 most expensive states.

How much does workers' comp cost by industry?

Workers' comp varies by 10x+ across industries. Construction workers typically cost 4× the state average rate; restaurant workers 2.5×; manufacturing 3×; healthcare 1.4×; retail 1.3×; office and technology workers 0.25×. On a $60,000 salary in California (base workers' comp ~1.5%), a construction employee costs ~$3,600/yr in workers' comp vs. ~$225/yr for a software developer.

What is the cost of benefits per employee?

Basic benefits (health insurance + PTO) typically cost $9,000–$12,000 per employee per year. Health insurance averages $7,500 for employee-only coverage. 10 days PTO at $60,000 = $2,307. Comprehensive benefits (add dental, vision, 401k) push this to $18,000–$22,000. Use Advanced Mode to model your exact benefits package.

How do I find the cheapest state to hire in?

Use the Compare States feature in this calculator. Enter your target salary and benefits, then compare two or three states side by side. The table above ranks all 51 jurisdictions by total employer cost for a $60,000 salary. For remote roles, the difference between hiring in California vs. South Dakota can exceed $6,000 per employee per year.

Now that you know what hiring costs — find the right payroll software

Compare Gusto, ADP, QuickBooks Payroll, OnPay, and others. See pricing, state coverage, and who each is best for.

Compare Payroll Software →

Estimates only. These results are based on publicly available data and standard formulas. Actual costs may vary based on your specific circumstances. This calculator does not constitute financial, tax, or legal advice. Consult a qualified professional for advice on your situation.

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Cheapest States for Payroll Taxes (2026)

Most Expensive States for Payroll Taxes (2026)

How Industry Affects Workers' Comp Cost

How This Calculator Works

Employee Cost by State

Employee Cost by Industry & State

Employee Cost Calculator: Common Questions

What is the average cost per employee?

Which states have the lowest payroll taxes for employers?

How much does workers' comp cost by industry?

What is the cost of benefits per employee?

How do I find the cheapest state to hire in?

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