MarginKoala

What does one worked hour of staff actually cost?

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Numbers to enter
Use actual annual employer dollars and the productive/worked hours you want those dollars spread across. No US payroll-burden percentage or 2,080-hour default is assumed.
$
$

Enter the actual annual employer-side dollars you want included: e.g. super/pension, payroll taxes, workers compensation, leave loadings, benefits or other applicable employment costs. Avoid double counting items already inside salary.

hrs/yr

Use the annual hours you want the employer cost allocated across. If paid leave or non-productive time is part of the annual cost but not the denominator, the resulting productive-hour cost will correctly be higher.

Koala's Calculated Result
Total annual employer cost divided by the productive/worked hours entered.

Add the annual wage/salary and the annual productive/worked hours. Add employer on-cost dollars that actually apply.

MarginKoalaKoala's Professional Opinion

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Frequently asked questions

What does "hourly cost of an employee" mean?

It is what one worked hour of an employee truly costs you — wages plus employer-side payroll taxes and benefits, divided by the hours that person actually works. It is fuller than the hourly wage on the paycheque.

Hourly Cost of an Employee

What is payroll burden?

This is a planning calculation, not a substitute for the accounting or tax treatment required in a particular jurisdiction. Use the same accounting basis and definitions as the business records, and apply jurisdiction-specific rules only when they have been verified for that entity and period.

Hourly Cost of an Employee

How many hours should I use per year?

There is no universal numeric benchmark for this decision. The right comparison depends on the industry, geography, business model, time period and exact metric definition. Use the business’s own history, economics and explicit target unless a verified benchmark matching that scope is available.

Hourly Cost of an Employee

Why does this matter for pricing?

Pricing work from wage alone can understate labour cost when the business also incurs employer-side costs. Use the calculated all-in cost per productive hour as one pricing input, then add the separate overhead and profit assumptions that apply to the job. MarginKoala does not assume a universal payroll-burden percentage.

Hourly Cost of an Employee

Should I include training or onboarding time?

Include training or onboarding dollars and hours when they are part of the cost you want the rate to recover. Whether to spread them across one job, a month or a longer period is an operating choice; keep the numerator and productive-hour denominator on the same chosen basis.

Hourly Cost of an Employee

Educational use, not financial advice. Numbers are estimates for planning; consult a qualified professional before acting on them.