Why a $14/hour employee costs $20

Why a $14/hour employee costs $20 - Mar. 26, 2010:
"NEW YORK (CNNMoney.com) -- You probably cost your boss a lot more than you think you do.

For Jim Garland, who owns a corporate aircraft cleaning and support services company, a $14 per hour worker has a true cost of $19.63 per hour, or about 40% more than base pay. This so-called 'loaded rate' includes fixed expenses -- federal and state taxes, health insurance, workman's compensation, uniforms, and paid time off -- along with soft costs like the time spent training a new hire.


Washington's lawmakers are throwing a lot of ammo at reducing the jobless rate, including a new tax break for hiring the unemployed. But no matter what incentives the government offers, it's hard to convince business owners to hire until they're absolutely certain they need to. Employees are often the most expensive investment a business makes."

The article only partially exposes the hidden employer costs per employee. Depending on the number of employees and the State, the "overhead" can almost equal the salary amount taken home. Taxes are only part of the cost. Ridiculous unemployment and disability insurance premiums (such as in New York City/State) can often force small employers to NOT hire more workers, since these cost would exceed any increase in revenue due to up-sizing their workforce. And now with the mandatory health insurance requirements, many small firms are probably looking to get below the cap of 50 full-time workers which may further increase unemployment in the US and hamper economic recovery.