Cost Per Hire Calculator

Cost per hire = base salary + employer taxes (FICA 7.65%) + health insurance + retirement match + software/tools + one-time costs (equipment, recruiting). The SHRM formula is: Cost Per Hire = (Internal Recruiting Costs + External Recruiting Costs) / Total Hires. Our calculator goes further by including the full ongoing employee cost.

According to SHRM, the average cost per hire in the US is around $4,700 for recruiting alone. But the true total cost (salary + benefits + overhead) typically runs 1.25x to 1.4x the base salary annually. A $60K employee usually costs $75K-$84K per year.

Federal Insurance Contributions Act - the employer pays 7.65% of salary (6.2% Social Security up to $168,600 in 2025, plus 1.45% Medicare with no cap). This matches what the employee also pays, making the total FICA burden 15.3%.

Job board fees ($200-500 per posting), recruiter fees (15-25% of salary for agencies), interview time for your existing team, background checks ($30-100), onboarding materials, and the 2-3 months of reduced productivity during ramp-up.

A good recruitment budget is 10-20% of the first-year salary for the role. For a $60K hire, budget $6K-$12K for recruiting costs. This covers job ads, recruiter tools, background checks, and interview time.

Hire an employee when you need ongoing work (20+ hours/week for 6+ months). Use contractors for project-based work, specialized skills needed temporarily, or when testing a role before committing. Employees cost more in benefits but are cheaper long-term for core roles.

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