Budgeting a US Team for 2027 | What Benefits Will Actually Cost You Per Employee

It is September, which means your finance team is building the 2027 budget. Somewhere in that spreadsheet is a line for your US employees, and there is a good chance it was calculated by taking last year’s number and adding a few percent.

That number is already wrong.

Aon reported in August 2026 that US employer health care costs will rise 9.5% in 2027, pushing the average cost above $19,000 per employee. It is the fourth consecutive year of high single-digit growth, following a decade in which increases averaged around 3%, and a significant step up from what we told you to budget for 2026. If your US benefits line grows at the same rate as your German, Dutch, or UK line, you will be underfunded before the first quarter closes.

At Foothold America, we build US employment budgets for European and Asian companies every year, and the same gap appears again and again: leadership teams budget for the salary and treat everything else as a rounding error. In the United States, everything else is roughly a quarter of the cost.

How much does a US employee actually cost beyond salary?

For a mid-level US hire, budget 20% to 36% on top of base salary for benefits and employer taxes. The percentage falls as salary rises, because health insurance is a flat dollar cost per person while payroll taxes are capped.

Here is the build-up at three salary levels, using the 2027 projected employer health contribution and 2026 payroll tax parameters:

Three things to take from this table.

The load is regressive. A $70,000 hire costs you 36% on top of salary. A $200,000 hire costs you 20%. If you are budgeting a team of junior and mid-level people, applying an executive-level percentage will leave you badly short.

Health insurance dominates. At the $70,000 level, the employer’s health contribution alone is larger than every tax and retirement line combined. This is the number that moves 9.5% next year, and it is the number worth managing.

This is the floor, not the ceiling. The table excludes paid time off, dental, vision, life and disability cover, state paid leave programs, and any equity. Add those and the real figure climbs further.

For context, the Bureau of Labor Statistics found in March 2026 that benefits make up 30.1% of total compensation for private industry workers, at $14.01 per hour on top of $32.60 in wages. That is roughly $43 in benefits for every $100 of salary, across the whole economy.

One further caution on the health line: the ~$15,800 employer figure is a blended average across all coverage tiers. Family coverage costs substantially more. KFF’s 2025 survey put the average family premium at $26,993, of which the employer paid roughly $20,143. If your US team skews toward employees with dependents, which a senior hiring profile usually does, budget above the blended average, not at it.

Get Started → Need a US employment budget you can defend to your board? Talk to our team about what your specific roles and states will cost.

Why are US health care costs rising 9.5% in 2027?

Health costs are climbing because of prescription drug spending, higher medical utilization, and rising chronic disease prevalence. Aon specifically cites specialty medications and the continued expansion of GLP-1 therapies into cardiovascular disease, sleep apnea, and chronic kidney disease treatment, alongside providers’ growing use of AI tools for clinical documentation and coding, which is lifting billed charges.

The trajectory is worth understanding before you set your assumption:

Figures from Aon, August 2026. The 2027 employer and employee shares are our estimates, applying Aon’s stated 82/18 split to the projected total.

Note that employer costs rose faster than employee contributions in 2026, 8.8% against 6.4%. Employers absorbed the larger share of the increase, and there is no sign of that reversing.

You may also see a lower figure quoted. Mercer projected a 6.5% increase for 2026, its highest since 2010. The difference is not a contradiction: Aon measures gross plan cost, while Mercer measures cost after employers make plan design changes. Mercer’s own respondents said their costs would have risen by nearly 9% without intervention. In other words, the 9.5% is what happens if you change nothing.

Budget the gross number. Then work to beat it.

Which US benefit costs do international employers miss?

The four most commonly missed lines are employer payroll taxes, state-mandated insurance programs, workers’ compensation, and the 401(k) match. None of these have direct equivalents in most European systems, so they rarely appear in a budget imported from head office.

Employer payroll taxes

US employers pay 7.65% in FICA: 6.2% Social Security up to the wage base, which the Social Security Administration set at $184,500 for 2026 and updates each October, and 1.45% Medicare with no cap. On top of that sit federal unemployment tax (effectively 0.6% on the first $7,000 per employee in most states) and state unemployment tax, which varies enormously by state and by your own claims history.

State-mandated insurance programs

This is the category that surprises people most. Five states mandate State Disability Insurance: California, Hawaii, New Jersey, New York, and Rhode Island. Separately, a growing list of states now run Paid Family and Medical Leave programs funded by payroll contributions.

For 2027 budgets specifically, one change matters more than the rest:

Maryland FAMLI contributions begin 1 January 2027. The total contribution is 0.90% of covered wages up to the Social Security wage base. Employers with 15 or more employees pay half (0.45%) and may withhold the other half from employees. Employers with fewer than 15 employees owe no employer portion. They remit the employee’s 0.45% only. Benefits themselves do not begin until January 2028, so 2027 is a year of paying in with nothing paid out.

Two Maryland deadlines fall inside this budget cycle: private plan Declarations of Intent opened on 1 September 2026 and close on 15 November 2026, and employees must receive notice before withholding begins, by December 2026.

Other programs to check if you employ in these states: Colorado (0.88% shared), Minnesota (employers pay at least half the premium), Delaware, Maine, and Washington.

Workers’ compensation

Workers’ compensation is mandatory in almost every state, priced by job classification and state, and not something you can decline. Office-based roles are relatively cheap, often in the 0.2% to 1% of payroll range, but rates for field, warehouse, or clinical roles run far higher.

The 401(k) match

A 401(k) plan is not legally required federally, but competitively unavoidable. Fidelity’s Q1 2026 data across 26,800 plans puts the average employer contribution at 4.8%, with the most common formula being a dollar-for-dollar match on the first 3% plus 50 cents on the dollar on the next 2%. Several states also now require employers to offer a retirement plan or enroll in a state-run alternative.

Why doesn’t your home-market benefits budget translate?

Because European employment costs are dominated by statutory contributions at predictable rates, while US costs are dominated by a discretionary benefit that inflates at three times the rate of wages.

A UK finance director who budgets 18% on-cost and applies it to a US team will be short by roughly half. And because the largest US line is contractual rather than statutory, it is the one line that can genuinely be managed, which is where the work is.

What does the ACA require once you reach 50 employees?

Once you employ 50 or more full-time equivalent employees, you become an Applicable Large Employer and must offer affordable, minimum-value health coverage or face penalties. For 2027 the IRS has set the affordability threshold at 10.22% of household income, the highest since the employer mandate began.

The 2027 penalties, set by IRS Revenue Procedure 2026-22:

• 4980H(a), failure to offer coverage to substantially all full-time employees: $3,780 per employee per year ($315/month), up from $3,340 in 2026. Assessed on your full-time headcount minus the first 30.
• 4980H(b), where coverage is offered but unaffordable or not minimum value: $5,670 per affected employee per year ($472.50/month), up from $5,010 in 2026

Both are commonly quoted as annual figures but are assessed monthly.

The higher affordability percentage is quietly good news: it gives you slightly more room to ask employees to contribute before coverage is deemed unaffordable. If you are approaching 50 FTEs during 2027, model the crossing point now. It is not a threshold you want to discover retrospectively.

How can you hold your 2027 increase below 9.5%?

The employers who beat the trend do it through plan design and purchasing scale, not by cutting cover. Five levers worth modeling before you finalize the budget:

1. Buy through a PEO master health plan. A small US subsidiary buying insurance alone is a tiny risk pool with correspondingly poor pricing. Joining a PEO’s master plan gives a ten-person US team access to rates negotiated for tens of thousands of lives. For most international companies below about 50 US employees, this is the single largest lever available.
2. Review your plan mix rather than your contribution split. Shifting cost to employees is the obvious move and the one most likely to cost you people in a tight market. Adding a high-deductible plan with an HSA contribution alongside your existing PPO gives employees genuine choice and usually lowers aggregate cost.
3. Set a GLP-1 policy deliberately. These drugs are a named driver of the 2027 increase. Decide consciously whether to cover them, with what clinical criteria, rather than inheriting the default.
4. Check your SUTA rate. State unemployment rates are experience-rated. If you have had turnover, your rate may have moved, and few international employers ever check.
5. Match your benefits to the market, not to head office. Use US benchmarking data for the specific states and roles you are hiring into. Over-provisioning against a European template is as expensive as under-provisioning is damaging.

What should be on your Q4 checklist?

How Foothold America helps international companies budget for US teams

We work exclusively with companies headquartered outside the United States, which means we spend our days translating between two very different employment cost models.

Through our Employer of Record service, your US employees are covered by our benefits program from their first day, at rates negotiated across our whole population rather than your headcount alone. No carrier negotiation, no plan design decisions, no ACA tracking on your side.

Through PEO+, companies with their own US entity get access to master health plan pricing while retaining direct employment, plus payroll tax administration, workers’ compensation, and multi-state compliance handled centrally.

For either route, we will build you a costed 2027 budget for the specific roles and states you are hiring into, so the number in your spreadsheet is one you can defend.

Get Started → Talk to our team about your 2027 US budget.