{"id":3582,"date":"2016-03-21T09:26:20","date_gmt":"2016-03-21T13:26:20","guid":{"rendered":"http:\/\/gtm.com\/business\/?p=2874"},"modified":"2024-08-30T11:24:40","modified_gmt":"2024-08-30T15:24:40","slug":"determine-the-true-cost-of-an-employee","status":"publish","type":"post","link":"https:\/\/gtm.com\/business\/determine-the-true-cost-of-an-employee\/","title":{"rendered":"How to Determine the True Cost of an Employee"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright size-medium wp-image-3594\" src=\"https:\/\/gtm.com\/business\/wp-content\/uploads\/IMG_1039-300x200.jpg\" alt=\"how to determine the true cost of an employee\" width=\"300\" height=\"200\" srcset=\"https:\/\/gtm.com\/business\/wp-content\/uploads\/IMG_1039-300x200.jpg 300w, https:\/\/gtm.com\/business\/wp-content\/uploads\/IMG_1039-1024x683.jpg 1024w, https:\/\/gtm.com\/business\/wp-content\/uploads\/IMG_1039-1080x720.jpg 1080w, https:\/\/gtm.com\/business\/wp-content\/uploads\/IMG_1039.jpg 1500w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/>If your business is interested in cost analysis, bidding jobs, or pro forma financial statements, you need to know how to determine the true cost of an employee.<\/p>\n<p>Calculating the true cost of an employee is more complex than most people realize. First, you need to determine the cost for each of the items below. Then, to calculate the actual cost of an employee, you add up the annual amount of each of these items.<\/p>\n<ul>\n<li><a href=\"https:\/\/www.labor.ny.gov\/ui\/bpta\/contribution-rates.shtm\" target=\"_blank\" rel=\"noopener\">State Unemployment Tax Contributions<\/a> (SUTA) \u2013 Your company\u2019s rate will depend upon its experience rating with unemployment claims and its length of time in existence. In most states, there is a wage base cap on your rates. If you do not know your rate, your payroll representative can generally provide it to you.<\/li>\n<li><a href=\"https:\/\/www.irs.gov\/Businesses\/Small-Businesses-&amp;-Self-Employed\/FUTA-Credit-Reduction\" target=\"_blank\" rel=\"noopener\">Federal Unemployment Tax Contributions<\/a> (FUTA) \u2013 This ranges from $42\/year to $420\/year for each employee. Where you fall depends on the credit the federal government allows you to take for your SUTA payments.<\/li>\n<li>Social Security Match\/Medicare Match \u2013 This is generally 7.65% of the employee\u2019s annual wages.<\/li>\n<li>Workers\u2019 Compensation Premiums \u2013 This is a percentage of the employee\u2019s annual salary. The rate varies based on the employee\u2019s job duties and the employer\u2019s experience rating with claims. Your workers&#8217; compensation carrier can tell you how much you pay for each employee.<\/li>\n<li>Health, Dental, Vision, Disability, Life Insurance Contributions &#8211; Include the amount the company contributes towards each of these benefits.<\/li>\n<li>Retirement Plan Contributions &#8211; Include the amount the company contributes annually to the employee&#8217;s 401(k) plan.<\/li>\n<\/ul>\n<p>Depending on employer contributions to benefits, you will most likely find that the true cost of an employee is somewhere between 120% and 140% of the employee&#8217;s gross wages. If you want to estimate the true cost of all of your employees, we recommend performing this calculation for a few employees and then coming up with an average percentage to use across the board.<\/p>\n<p>For more information on how GTM keeps clients informed about all payroll-related issues, <a href=\"https:\/\/gtm.com\/business\/contact-gtm\/\" target=\"_blank\" rel=\"noopener\">contact us<\/a> at (518) 373-4111.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If your business is interested in cost analysis, bidding jobs, or pro forma financial statements, you need to know how to determine the true cost of an employee. Calculating the true cost of an employee is more complex than most people realize. First, you need to determine the cost for each of the items below. [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[266],"tags":[11,20,16,10,66,23,13,44],"post_folder":[],"class_list":["post-3582","post","type-post","status-publish","format-standard","hentry","category-consulting-services","tag-business-payroll","tag-employee-benefits","tag-employees","tag-small-business","tag-social-security","tag-taxes","tag-unemployment","tag-workers-comp"],"_links":{"self":[{"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/posts\/3582","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/comments?post=3582"}],"version-history":[{"count":3,"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/posts\/3582\/revisions"}],"predecessor-version":[{"id":9626,"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/posts\/3582\/revisions\/9626"}],"wp:attachment":[{"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/media?parent=3582"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/categories?post=3582"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/tags?post=3582"},{"taxonomy":"post_folder","embeddable":true,"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/post_folder?post=3582"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}