Frequently Asked Questions
Why does a W-2 employee cost more than the salary?
Employers also pay their share of payroll taxes, benefits like health insurance and retirement matching, and overhead such as equipment, software, and office space. These add well beyond the base salary.
What payroll tax rate should I enter?
The employer share of FICA (Social Security and Medicare) is about 7.65 percent, which is the default. State unemployment and other taxes can add more depending on your location.
Is the cheaper option always the right choice?
No. This is a cost estimate only. Employees offer continuity and control while contractors offer flexibility, and misclassifying a worker can carry penalties. Confirm classification rules with a professional.
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Business Information Disclaimer: Estimates only. Not professional business advice.
This calculator provides estimates for informational purposes only. Business results vary by industry, market conditions, and execution. Not a substitute for professional business consulting, accounting, or legal advice. Consult qualified professionals before making business decisions.