Payroll Cost Calculator
Calculates the total cost of employing each person, including gross pay, employer tax contributions, and benefits. Produces a per-employee and department-level view of total employer cost.
Accounting - Payroll Cost Calculator.xlsx
Excel (.xlsx) — No macros — Works in Excel, Google Sheets, LibreOffice
What This Spreadsheet Solves
- Understanding the true cost of each employee beyond their salary
- Budgeting for employer-side taxes and benefit contributions
- Comparing total compensation cost across departments
- Estimating the cost impact of hiring additional headcount
- Providing payroll cost data for pricing and project costing
Who This Is For
- HR managers preparing payroll budgets
- Controllers calculating fully-loaded labor costs
- CFOs evaluating headcount expansion decisions
- Business owners understanding their largest expense line
Inputs
- textEmployee name
- $Annual gross salary
- %Employer tax rate
- $Monthly benefits cost
- textDepartment
Outputs
- Total employer cost per employee (salary + taxes + benefits)
- Employer tax amount per employee
- Annual benefits cost per employee
- Total payroll cost by department
- Benefits as percentage of total compensation
How Calculations Work
For each employee, the gross salary is multiplied by the employer tax rate to get the employer tax amount. Monthly benefits are annualized by multiplying by 12. Total employer cost is the sum of gross salary, employer tax, and annual benefits. Department totals are aggregated from individual employee costs. The benefits percentage shows how much of total compensation goes to benefits versus cash pay.
Example Use Case
Scenario: An employee earns $75,000 gross salary. Employer tax rate is 7.65% (FICA). Monthly benefits (health, dental, 401k match) cost $1,200.
Result: Employer tax is $5,738. Annual benefits cost is $14,400. Total employer cost is $95,138. Benefits represent 15.1% of total compensation. The employee costs the company 26.9% more than their gross salary.
What You Get — 5 Sheets
Technical Details
Frequently Asked Questions
Does this include employee-side tax withholding?
No. This template calculates employer-side costs only. Employee withholding reduces net pay but does not add to employer cost.
How do I handle hourly employees?
Convert hourly rates to an annual equivalent (hourly rate times expected annual hours) and enter that as the gross salary.
What if benefits vary by employee?
Enter the actual monthly benefits cost for each employee individually. The CONFIG defaults are just starting points.
Can I add other employer costs like workers comp?
Yes. Add additional cost columns on the INPUT sheet and include them in the total calculation on the LOGIC sheet.
How do I model a new hire?
Add a row on the INPUT sheet with the proposed salary and benefits. The department total and overall payroll cost will update automatically.
Download Payroll Cost Calculator
Ready to use immediately. Enter your data in the INPUT sheet, see results in OUTPUT.