The fully loaded cost of an employee: how to plan payroll in a startup
Payroll taxes, benefits, bonus and raises — why salary alone breaks your runway plan.
Salary is only the visible part of a hire. To plan cash, you need the fully loaded cost — and that's where many startup hiring plans break.
What goes into the cost of an employee
- Employer payroll taxes: in the US, FICA is 7.65% of wages up to the Social Security wage base, plus federal and state unemployment.
- Benefits: health insurance, retirement match, perks — often the largest add-on.
- Bonus: if there's a target bonus, provision it monthly.
- Raises: an annual raise compounds every 12 months of tenure.
Employees vs. contractors
A contractor costs the invoice amount, with no payroll taxes or benefits — but classification isn't a financial choice alone. Misclassification carries legal risk.
Hiring outside the US
If you hire in Brazil, the math changes completely: 13th salary, paid vacation plus one third, employer social security and the FGTS fund take a CLT employee to about 1.6x salary before benefits for companies outside the Simples Nacional regime. The headcount tool switches rules with one click.
Plan by start date
A hire in month 9 doesn't cost the same as a hire in month 1. Model each role with its start date and the payroll timeline shows exactly when burn steps up.
The headcount planner calculates each person's real cost, payroll by department month by month, and feeds that payroll straight into the runway model.