Taplin Systems
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Cost and staffing decisions / contractor calculators

True Employee Cost Calculator

Calculate annual employer cost and cost per productive labor-hour from wages, overtime, payroll burden, benefits, and paid nonproductive time.

01 / Inputs

Use your own numbers

Example values or your current session inputs are loaded. Replace them with your own figures. Every field is required; enter 0 where it applies and is allowed.

Minimum 0.
Greater than 0, maximum 168.
Greater than 0, maximum 52.
Minimum 0, maximum 168.
Minimum 0, maximum 52.
Minimum 1.
Employer taxes and wage-based insurance; do not repeat annual benefits here. Minimum 0, maximum 100.
Minimum 0.
Minimum 0.
Paid leave, training, and other paid time without production. Wages already cover this time; it reduces productive hours, not adds another wage charge. Minimum 0.

02 / Result

Your working numbers

True cost per productive labor-hour

$52.52

USD / productive labor-hour

Total annual employer cost
$89,280.00
Annual regular wages
$62,400.00
Annual overtime wages
$4,500.00
Employer payroll burden
$13,380.00
Annual benefits
$6,000.00
Annual other employee costs
$3,000.00
Total paid hours per year
2,180.00
Productive hours per year
1,700.00
Employer cost per paid hour
$40.95

Use these costs in a staffing decision

Each button opens that calculator and replaces only its paid-hour labor rate and efficiency: $40.95/paid hour and 77.98%. Existing values in those two fields will be replaced; other inputs stay unchanged. Full precision is retained. You can review and edit before calculating.

Calculate your current inputs to enable printing. Free internal job record, kept local. No document purchase required. Does not fill an Etsy template.

How the math works

Gross wages = base wage × regular hours × paid weeks + base wage × overtime multiplier × overtime hours × overtime weeks. Annual cost = gross wages × (1 + payroll burden %) + benefits + other costs. Productive hours = total paid hours − paid nonproductive hours. True productive-hour cost = annual cost ÷ productive hours.

Assumptions

Employer-cost estimate for one hourly employee. Does not add company overhead, customer markup, or company profit. Burden rates, overtime eligibility, wage rules, benefits, and productive-hour assumptions must be verified for your business.

Planning estimate only, calculated locally in your browser. Verify costs, tax treatment, labor rules, and availability with your accountant and actual records before deciding.

Contractor field notes

An employee’s wage is not their full employer cost

Employer payroll burden, benefits, training, and paid nonproductive time can make cost per productive hour substantially higher than the advertised wage. This tool distinguishes paid hours from productive hours and separates employer cost from a customer billing rate.

Annual employment cost divided by productive hours

Annual cost = regular wages + overtime wages + wage-based employer burden + benefits + other annual costs. Paid hours = regular hours/week × paid weeks + overtime hours/week × overtime weeks. Productive hours = paid hours − paid nonproductive hours. Productive-hour cost = annual cost ÷ productive hours.

Worked example

At $30/hour, 40 regular hours/week for 52 weeks costs $62,400. Five overtime hours for 20 weeks at 1.5× adds $4,500. A 20% employer burden on $66,900 wages adds $13,380. With $6,000 benefits and $3,000 other costs, annual employer cost is $89,280. Total paid hours are 2,180; subtract 480 nonproductive hours to get 1,700 productive hours. Cost is $52.52 per productive hour, versus $40.95 per paid hour.

Common estimating pitfalls

  • Do not charge paid leave as extra wages if the paid-week wages already include it.
  • Apply employer burden to the intended wage base and avoid repeating benefits in both burden and annual costs.
  • Do not confuse this employer cost with a selling rate that includes overhead recovery and company profit.

Frequently asked questions

What is paid nonproductive time?

Paid leave, training, meetings, or other paid hours without project production. It reduces the productive-hour denominator; wages for those hours are already included in total paid wages.

Should I use the productive-hour rate in the employee-versus-subcontractor tool?

That tool asks for a paid-hour cost and applies a separate efficiency factor. Use this tool’s paid-hour cost there, or use 100% efficiency with a carefully aligned productive-hour cost, to avoid counting downtime twice.

Does it determine legally required overtime or payroll taxes?

No. Enter applicable rates and eligible hours after checking your payroll rules. It does not determine exemptions, statutory rates, wage thresholds, or worker classification.