How much does your employer pay you per hour? You'd probably look at the figure on your paycheck. It might be eight dollars per hour, it might be eighty (I wish!), but either way, your boss is actually paying a lot more to keep you around. Here's why.
Employers sometimes refer to their actual cost per hour of employing personnel as a "loaded rate." The rate is calculated by adding your hourly wage to their fixed expenses. The fixed expenses an employer incurs on your behalf include taxes, insurance, worker's compensation and time off.
It's not easy to calculate, but you can estimate that it's around 40 percent of your hourly wage. Yeah, 40 percent! That means if you're making $10 per hour, your company is actually shelling out a loaded rate of about $14 per hour every time you work.
Taxes? What? I thought I paid those!
Well, you do, but so does your employer. Every employer is responsible for paying a federal unemployment insurance tax of 6.2 percent for the first $7,000 you make in a year. Some states add an additional tax of around 4 percent.
Your Medicare and Social Security tax might come out of your check every month, but that's only the half of it (no really, it's only half). For up to $106,800 of your annual salary, the employer and employee each pay half of the total tax.
Cost per hire
Did you know that when you get hired for a new job, your employer is actually betting a lot of money on you? That's their cost per hire. This number includes training costs, uniforms, "time to fill" (the amount of money the company loses by having a vacant position) and advertising (on great places like Snagajob).The sum total ain't cheap. Most places estimate this to be around $1,500 for each hourly employee.
What you're really worth
So what's the total damage? Let's assume you work about 15 hours a week, and you make $10 per hour. Your employer is shelling out nearly $17 per hour if you stick around for 12 months. Almost twice as much! That's a hefty chunk of change. Most employers are aware of the sizeable investment associated with each of their employees, so they'll be willing to work with you on small issues to get you to stick around. They are investing a lot of time and money in your success. So if you're having an issue in the workplace, before you go looking for a job somewhere else, be honest. Let your boss know what you need, find a workable solution and you'll reward their investment.