Michelle Edwards, CPA and owner of Trailhead Accounting Solutions, says "most business owners are surprised to learn that on average an employee will actually cost 25 percent to 40 percent above their wages/salary amount."
Here's how much you should expect to add on top of salary to calculate the total cost per employee:
- Employer share of payroll taxes: +15 percent. Social Security, Medicare and FICA.
- Paid time off: +10 percent. Vacation, holidays, sick time and jury duty.
- Health insurance: +10 percent. It has become traditional now for the employer to split the cost 50-50.
- 401K: Many employers match up to 6 percent of the employee contribution.
- Other perks: +5 percent. Company cars, tuition reimbursement, and holiday bonuses.
How do you calculate your added cost of an employee beyond their salary?
Read the full article at CPA in Erie.
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