Real Cost to Employ based on a $8.50 an hour salary
Hard Cost- Breakdown (per hour)
FICA(Social Security) 6.20% = $ .53
FUTA( Unemployment) 0.08% = $ .07
Medicare 1.45% = $ .12
SUTA(state unemployment) 1.50% = $ .13
Workers Comp 5.36% = $ .46
—Total Hard Cost = $ 1.31
——-
Soft Cost -Breakdown
Administrative Costs = $ .51
Recruitment & Interviewing Costs = $ 1.31
Benefit Costs = $ 2.21
Increase W/C Costs = –
Legal Fees = –
Lost Revenue due to
Poor Productivity = –
—-Total Soft Cost = $ 3.70
Administrative Costs
Total wages of HR, Payroll and Assistant Administrative Personnel involved in handling:
• Payroll
• Employee paperwork
• Reporting and paying quarterly taxes
• Year-end reports
• W-2’s, W-4’s, I-9’s
• Handling workers comp. claims
• Unemployment claims
• Employee complaints
HR Director HR/Payroll Asst.
Per Hour Wage $18.26 $9.61
Hard Costs $1.88 $0.99
Totals $20.14 $10.60 = $30.74
Divide by Number of Employees
= 60
Total Administration Costs per Employee per Hour
$ 0.51
Recruitment Costs
One ad for 30 days = $320.00 to fill one position!
Cost of ad per hour for new hires for:
First 30 days or 160 hours = $2.00 per hour
at 320 hours = $1.00 per hour
at 480 hours = $ .66 per hour
Total Recruitment Costs $ 1.00
Interviewing Costs
HR Time at $20.14 per hour times number of Hours Interviewing
For example: 10 half-hour interviews = 5 hours x $20.14 per hour = $100.70
New Hire Cost: at 160 hours = $.63 per hour
at 320 hours = $.31 per hour
Total Interviewing Costs $ 0.31
Benefit Costs
Health Insurance
Single Female 33 years old
$239 per month x 12 months = $2868 per year
$2868 / 2080 work hours = $1.38 per hour
—
Health Insurance $ 1.38 per hour
—
Vacation Pay – Two Weeks Vacation
$8.50 per hour plus $1.31 taxes & hard costs = $9.81 per.hour
$9.81 x 80 hours = $784.80 / 2080 hours = $.38 per hour
Vacation Pay $ 0.38
Sick Pay – Six Days
$8.50 per hour plus $1.31 taxes & hard costs = $9.81
$9.81 x 48 hours = $470.88 / 2080 hours = $.23 per hour
—
Sick Pay $ 0.23
—
Holiday Pay – Six Days
$8.50 per hour plus $1.31 taxes & hard costs = $9.81
$9.81 x 48 hours = $470.88 / 2080 hours = $.23 per hour
—-
Holiday Pay $ 0.23
—
Total Benefit Costs $ 2.22
Total cost to employ = $ 13.51
This is a large attributor to a 58.6% labor participation. The next time you are at work think of this.
andrewsoption 