Employee Burden Rate Calculator

The burden rate is the ratio of an employee's true total cost to their base wage — it captures everything beyond gross pay, including employer payroll taxes, benefits, workers' compensation insurance, and overhead. A burden rate of 1.35 means the employee actually costs 35% more than their base wage suggests.

Employer-paid payroll taxes (Social Security and Medicare match, typically 7.65% combined), benefits (health insurance, retirement match, paid time off), workers' compensation insurance (varies widely by industry risk, roughly 0.5-5% of wages), and overhead (equipment, software, office space) allocated per employee.

Most W-2 employees have a burden rate between 1.25 and 1.40 — meaning their true cost is 25-40% above their base wage. Comprehensive benefits packages in high-cost markets can push this above 1.5.

An employee's paycheck reflects their gross wage minus their own withheld taxes — it doesn't show the employer's side of payroll taxes, benefits contributions, or other costs the business bears separately. The burden rate captures the employer's full cost, not what shows up on the employee's pay stub.

Yes — include the value of paid vacation, sick leave, and holidays in the annual benefits cost field. PTO is time the employee is paid but not producing work, so it's a real cost that belongs in the burden calculation, not a separate category.