Employees Hourly Pay

[River Hill]

If I pay an employee $15.00 per hour, what would you guess the actual expense to me would be? I know if varies by employer, but I am trying to get a estimate. This should include workers comp., social security, unemployment insurance, and any other required cost.

[Lawn Lad]

Obviously each state differs. I use the following numbers for budgeting.

Social Security: 6.2%
Medicare: 1.4%
FUTA = .8%
SUTA = 3% (depends on whether or not your employees use this)
Worker's Comp: 7%

This totals 18.4%, so on $15.00 per hour, add $2.76 per hour.

What this doesn't include in your budgeting, and not requested, is the cost of overtime and other indirect overhead expenses. I will add into my hourly cost a percentage to recover the non-billable time for each employee and overtime. Overtime considerations are also an indirect overhead item, on which you will have to caugh up payroll taxes.

[River Hill]

Thanks for the information. I was guessing around 20%. I already know my other indirect operating cost.