Employer cost calculator 2026

Example: a 1200 € gross salary step by step

Say a small company hires a customer service assistant on a gross salary of 1200 €.

On this page the table percentages are relative to total cost, not to gross. Gross salary makes up 74.7% of the cost, social tax 24.7% and unemployment insurance 0.6%. The employee's account receives 65.8% of the money the employer spends; the rest goes to the state as taxes and contributions and to the employee's pension account.

The calculator adds the two employer contributions on top of gross and shows alongside what the employee keeps:

• Social tax: 1200 × 33% = 396.00 €.
• Employer unemployment insurance: 1200 × 0.8% = 9.60 €.
• Monthly total cost: 1200 + 396.00 + 9.60 = 1,605.60 €.
• Annual total cost: 1,605.60 × 12 = 19,267.20 €.
• Employee net pay (2% II pillar, exemption applied): 1,056.30 €.

In reverse: from a budget to gross salary

Often a company has a budget rather than a salary figure. Choose "From total cost" and enter the budget. 3000 € a month allows a gross salary of 2,242.14 €, plus social tax of 739.91 € and insurance of 17.94 €. The employee takes home 1,839.92 €. With a 4000 € budget, gross is 2,989.53 € and net 2,401.89 €.

As long as gross stays above the social tax monthly base (886 €), the rule of thumb is simple: gross = total cost ÷ 1.338. The calculator finds gross by successive approximation, so its answer may be a cent away from dividing by hand. For small budgets the rule breaks down: a 1000 € total cost buys a gross of only 701.99 €, because social tax must be at least 292.38 €.

Part-time work: the minimum obligation in numbers

The minimum obligation makes a low-paid job far more expensive in percentage terms.

The "Apply social-tax minimum" box is ticked by default because that is the normal case. Untick it only if you know the minimum does not apply to that particular employee. Check the exact conditions of the exceptions in the Tax and Customs Board guidance first, because a wrong assumption understates the cost.

The minimum also has a surprising effect on pay rises. If a part-timer's pay goes from 400 to 500 €, employer cost rises by only 100.80 €, because social tax stays the same. Up to the monthly base (886 €) each euro of pay adds just 1.008 € of cost; above it, 1.338 €.

The figures in different situations:

• Gross 400 €: social tax 292.38 € (73% of pay), insurance 3.20 €, total cost 695.58 €.
• The same 400 € without the minimum: social tax 132.00 €, total cost 535.20 €. A difference of 160.38 € a month.
• 800 € in a second job: social tax 292.38 € instead of the usual 264 €, total cost 1,098.78 €.
• 886 € or more: the minimum no longer matters, since 33% of pay is already at least 292.38 €.

Pay rises and hourly cost from the employer's side

Above a gross of 886 €, every 100 € of pay rise costs the employer 133.80 €. The employee's net pay meanwhile grows by about 75 € (75.20 € when going from 1200 to 1300 €). That is why a rise feels smaller to the employee and bigger to the employer than the contract figure suggests.

It also helps to divide the total cost by hours. 1,605.60 € a month over 168 working hours is 9.56 € an hour, although the contractual hourly rate is 7.14 €. That hourly figure is the one to compare with the price of outsourcing or buying a service, keeping in mind that a service invoice may carry VAT on top.

Bear in mind too that pay continues during holidays while no work is done. Over a year, the cost of an hour actually worked is therefore higher than the monthly cost divided by the month's working hours.

What is still missing from employer cost

The calculator covers salary and the mandatory employer contributions on it. The real cost of a job is higher:

• Holiday pay is salary too and carries the same taxes. Since monthly pay and holiday pay come out of the same budget, plan the annual cost with the holiday pay calculator.
• Sick pay: the employer pays 70% of average earnings for days 4 to 8 of an illness. The sick leave calculator shows this.
• Fringe benefits, such as a company car used privately, add separate income and social tax. A benefit worth 100 € costs the employer 170.52 € in total.
• Equipment, training, the workplace itself and recruitment are not payroll costs, but they are part of what a job really costs.

Typical budgeting mistakes

The most common mistake is to think income tax is an employer cost. In fact income tax, employee unemployment insurance and the II pillar contribution are withheld from gross, so they do not add a single cent to the employer's cost. Total cost depends only on gross, not on the employee's exemption or pension rate.

The second mistake is comparing an employee's gross directly with a contractor's invoice. An employee costs 33.8% more than their gross, and a part-timer even more. The third is budgeting a year as monthly pay × 12 and forgetting bonuses and the taxes on them.