Business · Free calculator

Cost of a new hire

The yearly and hourly cost of an employee with taxes, Paid Leave and benefits, compared with a contractor. No account needed.

Your numbers

Answer each Yes/No question, then fill in the amounts that appear. Use 0 only when an amount is truly zero. Want to see how it works first? Load example numbers below.

Will this person be your employee, working in Minnesota, and not an owner or an owner’s close relative?

Owners, and the spouse, children or parents of a sole proprietor, follow different payroll tax rules. Other states have their own unemployment and leave taxes.

YesNo

How will you pay this person?Pick the way the job is offered. Hourly pay over 40 hours a week is paid at time and a half.

What hourly wage will you pay? (dollars)

Before taxes. For example, 22. Not sure? Check what similar jobs near you pay on job sites.

How many hours a week will they work? (hours)

Paid hours in a usual week, full-time or part-time. For example, 40 for full-time or 20 for part-time. Either way the person earns Minnesota sick and safe time. For a salaried person, the hours they really work: we use it for the cost per hour and sick time.

When do they start in 2026?Payroll taxes reset every January, so the first months of the year cost more. Pick January to see a full year.

What kind of work will they do?Sets the example workers’ compensation rate and Minnesota’s 2026 unemployment insurance rate for a new employer in that industry. Pick the closest.

Which workers’ compensation rate should we use?Minnesota requires workers’ compensation insurance once you have an employee. Your insurance quote shows a rate per $100 of payroll for each job type.

Which Minnesota unemployment insurance rate should we use?A business that hasn’t had employees yet gets its industry’s new-employer rate. After that, UI Minnesota mails a rate notice each December.

Does your business pay the lower small-employer rate for Minnesota Paid Leave?The lower rate applies on its own to employers with 30 or fewer employees whose average pay is $110,983 a year or less. Your yearly Paid Leave rate notice says which. Not sure? Most small businesses get it.

Will you pay for any benefits or other costs for this person?

Health insurance, a retirement match, a payroll service fee or equipment. Answer No to see wages and payroll taxes only. With fewer than 50 full-time employees you don’t have to offer health insurance.

YesNo

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Assumptions, sources & limitations

Planning estimates only. Not a tax return, filing, payment, lending quote or personalized advice. Results depend on complete and accurate inputs. No guarantee of savings or penalty protection. Tax figures checked October 31, 2026; changes and special rules may apply. This initial release needs firm validation before client reliance.