What does a US employee really cost?
Employing someone in the US usually costs 1.2 to 1.4 times their base salary. See the full cost of your hire in any state, with payroll taxes, insurance and benefits included, in USD, GBP or EUR.
Your US hire
Remote employees are taxed where they work, not where your office is.
Health cover is the biggest benefit cost in the US. Senior hires expect it.
Fine-tune the estimate
Some state leave programmes only charge employers above a headcount.
Add your EOR, PEO+ or payroll provider fee to see the full picture.
The same hire in every US state
Annual cost with your settings, using each state's default rates. All 50 states and DC, ranked from most to least expensive.
Planning estimate using 2026 federal and state rates. Health premiums use KFF 2025 employer averages plus a 6% 2026 trend. State unemployment uses the published new-employer rate unless you enter your own. Your exact costs depend on your rate notices, insurer quotes and plan choices. This is not tax or legal advice.
The short answer
How much does it cost to employ someone in the US?
Most companies pay between 1.2 and 1.4 times an employee’s base salary once employer taxes, insurance and benefits are added. The exact figure depends on several factors, so no two US hires cost the same.
base salary, once taxes, insurance and benefits are added
typical yearly cost of a $120,000 hire
employer Social Security and Medicare, up to $184,500 of pay
At Foothold America, we help UK and European companies hire and employ people across the US. We know where the hidden costs sit, and we price every hire around your plans. Use the calculator as a reliable starting point, then talk to our team for an exact quote.
What drives the cost
What affects the cost of a US employee?
Your employee’s home state sets their unemployment tax, paid leave contributions and local rules. Your office location does not. With a remote team you can hire in any state, so it pays to compare before you recruit.
The state they live in
Unemployment tax, paid leave programmes and local rules change from state to state.
Salary and bonus
Social Security stops at $184,500 of pay, so the percentage cost falls for senior hires.
Health insurance
The plan you choose, and whether you cover family members, is the biggest single variable.
Retirement and other benefits
A 401(k) match, dental, vision, life and disability cover all add up.
Your US team size
Some state programmes only charge employers above a certain headcount.
How you employ them
An Employer of Record, a PEO+ service or your own US entity each carry different costs and responsibilities.
UK vs US
Why US employment costs surprise European companies
Employer payroll taxes are often lower in the US than in the UK or Europe. Benefits make up the difference, and senior candidates expect a competitive package from day one. Here is how the main costs compare with the UK.
Cost
In the US
In the UK
Health insurance
In the US
- Employers fund most of the premium, around $8,000 a year for single cover
In the UK
- Covered by the NHS through taxes
Employer payroll tax
In the US
- 7.65% for Social Security and Medicare, plus unemployment tax
In the UK
- 15% employer National Insurance above the threshold
Pension
In the US
- A 401(k) match is optional, but 3% to 6% is expected
In the UK
- Auto-enrolment, with at least 3% from the employer
Paid holiday
In the US
- No federal minimum, so it is agreed in the offer
In the UK
- At least 28 days, including bank holidays
Where the rules come from
In the US
- Federal law plus 50 different state rule books
In the UK
- Mostly one set of national rules
What’s included
Every cost of a US employee, in one place.
Federal payroll taxes
Social Security at 6.2% on pay up to $184,500, Medicare at 1.45% on all pay, and federal unemployment tax on the first $7,000.
State taxes and leave programmes
Every state sets its own unemployment rate and wage base. Nine states and DC also charge employers for paid leave or disability cover.
Health insurance
The biggest benefit cost in the US. There is no national health service, so employers fund most of the premium for employee or family cover.
Dental, vision, life and disability
Senior US candidates expect them as standard. They are part of the benefits package we offer through our Employer of Record service.
401(k) and workers' comp
The 401(k) is the US workplace pension, and employer matches of 3% to 6% are common. Workers’ compensation is required in almost every state.
Remote working costs
A laptop, equipment and a home office stipend for remote employees. You can also add a recruitment fee, travel to HQ and a provider fee.
State by state
Employer payroll tax rates by state in 2026
Every state sets its own unemployment tax. The table shows the 2026 new-employer rate and the annual wage it applies to. It also lists state paid leave and disability programmes that charge employers.
| State | New employer SUTA rate | SUTA wage base | Employer leave or disability programmes |
|---|---|---|---|
| Alabama | 2.7% | $8,000 | None |
| Alaska | 1% | $54,200 | None |
| Arizona | 2% | $8,000 | None |
| Arkansas | 2% | $7,000 | None |
| California | 3.4% | $7,000 | None |
| Colorado | 3.05% | $30,600 | FAMLI paid leave |
| Connecticut | 1.9% | $27,000 | None |
| Delaware | 1.2% | $14,500 | Delaware Paid Leave, medical and family, Delaware Paid Leave, parental |
| District of Columbia | 2.7% | $9,000 | DC Paid Family Leave |
| Florida | 2.7% | $7,000 | None |
| Georgia | 2.7% | $9,500 | None |
| Hawaii | 2.45%* | $64,500 | Temporary Disability Insurance |
| Idaho | 1% | $58,300 | None |
| Illinois | 3.35% | $14,250 | None |
| Indiana | 2.5% | $9,500 | None |
| Iowa | 1% | $20,400 | None |
| Kansas | 1.75% | $15,100 | None |
| Kentucky | 2.7% | $12,000 | None |
| Louisiana | 2%* | $7,000 | None |
| Maine | 2.54% | $12,000 | Maine PFML |
| Maryland | 2.6% | $8,500 | None |
| Massachusetts | 2.42% | $15,000 | MA PFML |
| Michigan | 2.7% | $9,000 | None |
| Minnesota | 1.6%* | $44,000 | Minnesota Paid Leave |
| Mississippi | 1.2% | $14,000 | None |
| Missouri | 2.376% | $9,000 | None |
| Montana | 1.18%* | $47,300 | None |
| Nebraska | 1.25% | $9,000 | None |
| Nevada | 3% | $43,700 | None |
| New Hampshire | 2.7%* | $14,000 | None |
| New Jersey | 2.8% | $44,800 | Temporary Disability Insurance |
| New Mexico | 1% | $34,800 | None |
| New York | 4.1% | $17,600 | Disability Benefits Law cover |
| North Carolina | 1% | $34,200 | None |
| North Dakota | 1% | $46,600 | None |
| Ohio | 2.85% | $9,000 | None |
| Oklahoma | 1.5% | $25,000 | None |
| Oregon | 2.4% | $56,700 | Paid Leave Oregon, Workers’ Benefit Fund |
| Pennsylvania | 3.822% | $10,000 | None |
| Rhode Island | 1.21% | $30,800 | None |
| South Carolina | 1.06% | $14,000 | None |
| South Dakota | 1.75% | $15,000 | None |
| Tennessee | 2.7% | $7,000 | None |
| Texas | 2.7% | $9,000 | None |
| Utah | 1.2%* | $50,700 | None |
| Vermont | 1% | $15,400 | None |
| Virginia | 2.5% | $8,000 | None |
| Washington | 1.2%* | $78,200 | WA Paid Leave |
| West Virginia | 2.7% | $9,500 | None |
| Wisconsin | 2.5% | $14,000 | None |
| Wyoming | 1.5%* | $33,800 | None |
*Rate varies by industry. The figure shown is a planning estimate. Federal taxes apply in every state: Social Security 6.2% on pay up to $184,500, Medicare 1.45% on all pay and FUTA 0.6% on the first $7,000.
Free guides to US employment costs
US Employee Benefits Benchmark
The US legal floor is far shorter than most employers expect, and this is what the market expects on top of it.
Navigating US Health Insurance
Offering health insurance to employees across the US can be complex. Learn how to navigate state-specific regulations, choose the best plan options, and streamline benefits administration with our exclusive guide.
Employer of Record vs PEO Guide
Employer of Record, PEO+ or your own US entity, compared on who carries the entity, the liability and the cost.
Your First US Employee Guide
Every step, deadline and cost involved in putting your first person on a US payroll.
Want an exact figure?
A calculator gives you a reliable starting point. A conversation gives you the real number for your hire.
Laurie Spicer
Director of US Expansion. UK based.
What to expect on the call
- No sales pitch, just an honest read on your plans
- A cost estimate for your role, salary and state
- Clear advice on EOR, PEO+ or setting up your own entity
- Come as you are, no prep needed
Book a call with Laurie
US employee cost: FAQs
Straight answers about the cost of employing people in the US.
Most employers pay 1.2 to 1.4 times base salary in total. The range depends on the state, the health plan and benefits such as the 401(k) match. A $120,000 hire typically costs $145,000 to $170,000 a year.
Employers pay Social Security at 6.2% on pay up to $184,500 and Medicare at 1.45% on all pay. They also pay federal unemployment tax of 0.6% on the first $7,000, plus state unemployment tax. Some states add paid leave or disability contributions.
No. An Employer of Record (EOR) can legally employ your US team for you, without a US entity. If you already have a US entity, a PEO+ service can run HR, payroll and benefits for you.
Under the Affordable Care Act, employers with 50 or more full-time equivalent employees must offer affordable cover. Hawaii requires it for most employees regardless of size. In practice, senior candidates expect health insurance from day one.
Differences in employer taxes between states are usually a few hundred to a couple of thousand dollars a year. Salary levels and benefits matter far more. Use the state comparison in the calculator to see the gap for your hire.
No. It shows what you pay as the employer. The employee’s income tax and their share of Social Security and Medicare come out of their salary.
It uses published 2026 federal and state rates and average benefit costs. Your exact costs depend on your state rate notices, insurance quotes and plan choices. For a precise figure, speak to our US expansion team.
Know the full cost before you hire.
Tell us about the role you want to fill. One conversation is often enough to see the full cost and the best way to employ them.
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