How to Calculate the Total Employee Expenses
It's obvious to any employer that staffing costs money. Just how much money it costs is not always clear, however. While employers usually know the gross salary paid to their employees, that is only the tip of the iceberg when it comes to employee expenses. Calculate your total employee expenses by factoring in all of your payments and contributions.
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1.
Add up the total value of your employees' gross salaries. This includes all wages that are paid for working hours and paid breaks.
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2.
Add the value of paid time off including sick days and holidays for which the employees are paid.
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3.
Add the company contribution to any health, dental, life or other insurance policies for employees.
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4.
Add the cost of employment taxes under the Federal Insurance Contributions Act tax.
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5.
Add the value of Federal Unemployment taxes.
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6.
Add the cost of state unemployment insurance.
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7.
Add the cost of your worker's compensation contributions.
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8.
Add the costs of any additional benefits or training that you provide to your staff.
References
- "Accounting: Concepts and Applications"; W. Steve Albrecht et al; 2007
- "Human Resource Management"; Pravin Durai; 2010
Writer Bio
M. Scilly is a writer and editor who writes for various online publications, specializing in business and management. He has a fondness for travel and photography. In his free time he enjoys marathon training.