Free Employee Cost Calculator
The salary is not the cost. Statutory contributions, benefits, equipment, and a share of overhead push a hire to 1.25x-1.4x their pay - this calculator shows the true cost per year, per month, and per working day before you make the offer. Any currency, free, no sign-up.
What the law makes the employer pay on top: Nigeria pension is 10%, US payroll taxes ~8%, UK employer NI ~15%. Use your country's figure.
The rule of thumb is 1.25x-1.4x salary; if your multiplier is below 1.2x, something is probably missing from the list.
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Employee Cost FAQ
How much does an employee really cost?
Typically 1.25x to 1.4x their gross salary. On top of pay, the employer carries statutory contributions (Nigeria: 10% employer pension; US: roughly 8% payroll taxes; UK: about 15% employer National Insurance), benefits like health cover and a 13th month, equipment and software, and a share of workspace and admin overhead. The calculator adds it up line by line.
What statutory costs does a Nigerian employer pay?
The big one is the employer pension contribution - a minimum of 10% of the employee's basic + housing + transport, on top of the employee's own 8%. Depending on size and sector there's also ITF (1% of payroll), NSITF (1%), and group life insurance. Together they commonly add 12-15% to payroll - check which apply to your headcount and sector.
Why include equipment and overhead - isn't that a business cost anyway?
Because the hire causes it. A new employee needs a laptop, software seats, a desk, and support - costs that scale with headcount even when no single invoice says their name. Pricing a hire on salary alone is how a team of five costs like a team of seven.
How do I know if I can afford the hire?
Compare the true monthly cost against the margin the role will add or protect - not against revenue. If the hire's job is to serve sales you already make, your net profit must absorb the full cost from month one; new hires typically take 3-6 months to cover themselves even in the best case.
Employee or contractor - which costs less?
A contractor's higher day rate often still beats an employee's true cost for part-time or short-term needs, because you skip the statutory add-ons, equipment, and idle time. For full-time, permanent workloads, employees usually win. Run this calculator against the contractor's likely annual billings and compare like with like.
How is this different from a Growpins Ledger account?
This estimates one hire. Growpins Ledger tracks your actual payroll and every other expense against income, so you can see - in the P&L, not in theory - whether the team is paying for itself.
Know if the team is paying for itself
Growpins Ledger tracks payroll and every other expense against your income, so the affordability question gets answered by your P&L instead of a guess - built by the team behind Growpins, founded by Dokun Bamigboye. Free tier, no card required.
Get Started FreeHiring in Nigeria? Pair this with the PAYE Calculator for the employee's side, check the cash with the Cash Flow Calculator, or browse all free tools.