Methodology — the employer-cost engine
Published . Every figure in this guide is computed by the calculator engine or taken from its cited primary sources. Rates verified on 2026-10-26.
Filed under Methodology · Methodology · Tags: Employer cost, FUTA, SUTA, Workers' comp
What the total includes
Gross wages, the employer's share of FICA (6.2% Social Security to the wage base + 1.45% Medicare), FUTA, SUTA, a workers' compensation estimate, and the benefits package — each as its own sourced line in the result.
SUTA: the new-employer rate, and its limits
The engine uses each state's published new-employer rate: the experience rate that replaces it depends on the employer's own claims history and is not modeled. Where a state publishes an industry class schedule, the schedule can be applied — encoded today for Minnesota (51 DEED industry rates; the separate 0.40% base rate and 14% assessment are not included) and Montana (classes A–K, with the official unclassified default of 2.00%). For Louisiana, New Mexico, Washington and Wyoming — and Minnesota/Utah without a class — no published schedule exists, so SUTA is shown as $0.00 with a warning rather than an invented average: those totals understate the true cost by the whole SUTA amount.
FUTA and the credit reduction
FUTA is 6.0% on the first $7,000 per employee, minus the 5.4% standard credit for state unemployment taxes: a net 0.6% everywhere in this pack. The final 2026 credit-reduction list is published in November 2026. On the DOL's potential list of January 15, 2026, California is the only state named, with a potential reduction of 0% plus a possible benefit-cost-rate add-on estimated at 0% — an effective rate of up to 0% if applied and not waived. Every California result carries that warning; the rate applied stays 0.6% until the final list lands.
Workers' compensation is an estimate
| Clerical / office (low risk) | $0.15 – $0.5 per $100 of payroll (midpoint $0.3 feeds the total) |
|---|---|
| Construction (high risk) | $4 – $13 per $100 of payroll (midpoint $7 feeds the total) |
| Manufacturing / light industrial | $1.8 – $4.5 per $100 of payroll (midpoint $2.8 feeds the total) |
| Restaurant / food service | $1.2 – $2.8 per $100 of payroll (midpoint $1.8 feeds the total) |
| Retail / store staff | $0.8 – $1.9 per $100 of payroll (midpoint $1.2 feeds the total) |
| Trucking / delivery driving | $3.5 – $9 per $100 of payroll (midpoint $5.5 feeds the total) |
Exact premiums are class-code specific, licensed (NCCI), and depend on the employer's experience modification rate. Only an insurer quote is exact — the engine carries the published range on the line and feeds the total with the midpoint.
Benefits are assumptions, labelled as such
Defaults from the parameter file: health insurance $650/employee/month, retirement match 3% of wages, other benefits 0%. Every benefits line is flagged assumption: true in the result. Paid time off is not added — it is already inside gross wages.
Not modeled — totals are a lower bound there
- California ETT (0.1% on the SUTA base), New York MCTMT, Washington PFML and Massachusetts PFML employer shares, New Jersey employer UI/DI add-ons, Hawaii and Rhode Island TDI employer shares, and local employer taxes.
- Multi-state workforces and wage-base carryover between states: one state, one wage figure per employee, all employees equal.
Payroll and tax services
Running payroll or filing for real takes a provider, not a calculator. This space is reserved for services we may partner with; partner links are always labelled and pass through a disclosure redirect. How that works: affiliate disclosure.
- Gusto — payroll for small employers — partner link not active yet
- QuickBooks — accounting and payroll for the self-employed — partner link not active yet