"Real" Cost of Employees

"Real" Cost of Employees

Do you know what the real costs of hiring an employee are? Take a look at the example worksheet below, then fill one out for yourself. Click here to download the blank worksheet.

* Based on an $8.50 per hour employee.


	Hard Cost

FICA

6.20%

$ .53

FUTA

0.08%

$ .07

Medicare

1.45%

$ .12

SUTA

1.50%

$ .13

Workers Comp

5.36%

$ .46

Total Hard Cost

$ 1.31


	Soft Cost

Administrative Costs

$ .51

Recruitment & Interviewing Costs

$ 1.31

Benefit Costs

$ 2.21

Increase W/C Costs

_____

Legal Fees

_____

Lost Revenue due to

Poor Productivity

_____

Total Soft Cost

$ 3.70


	$ 13.51

* Estimates Only
An $8.50 per hour
Employee really costs:


	Soft Cost Breakdown

Administrative Costs

Total wages of HR, Payroll and Assistant Administrative Personnel involved in handling:

Payroll
Employee paperwork
Reporting and paying quarterly taxes
Year-end reports
W-2�s, W-4�s, I-9�s
Handling workers comp. claims
Unemployment claims
Employee complaints

HR Director

HR/Payroll Asst.

Per Hour Wage

$18.26

$9.61

Hard Costs

$1.88

$0.99

Totals

$20.14

$10.60

$30.74

Divide by Number of Employees

Total Administration Costs per Employee per Hour

$ 0.51

Recruitment Costs

One ad for 30 days = $320.00 to fill one position!

Cost of ad per hour for new hires for:

First 30 days or 160 hours = $2.00 per hour

at 320 hours = $1.00 per hour

at 480 hours = $ .66 per hour

Total Recruitment Costs$ 1.00

Interviewing Costs

HR Time at $20.14 per hour times number of Hours Interviewing

For example: 10 half-hour interviews = 5 hours x $20.14 per hour = $100.70

New Hire Cost: at 160 hours = $.63 per hour

at 320 hours = $.31 per hour

Total Interviewing Costs$ 0.31

Benefit Costs

Health Insurance

Single Female 33 years old

$239 per month x 12 months = $2868 per year

$2868 / 2080 work hours = $1.38 per hour

Health Insurance

$ 1.38

Vacation Pay � Two Weeks Vacation

$8.50 per hour plus $1.31 taxes & hard costs = $9.81

$9.81 x 80 hours = $784.80 / 2080 hours = $.38 per hour

Vacation Pay

$ 0.38

Sick Pay � Six Days

$8.50 per hour plus $1.31 taxes & hard costs = $9.81

$9.81 x 48 hours = $470.88 / 2080 hours = $.23 per hour

Sick Pay

$ 0.23

Holiday Pay � Six Days

$8.50 per hour plus $1.31 taxes & hard costs = $9.81

$9.81 x 48 hours = $470.88 / 2080 hours = $.23 per hour

Holiday Pay

$ 0.23

Total Benefit Costs$ 2.22