What Does a Part-Time Employee Really Cost? A Worked Example at $18/Hour
Say you hire someone at $18/hour for 25 hours a week, all year. Their wages come to $23,400. Here's what the business actually spends, and why it lands around $19.80 per hour worked before benefits.
The line items
| Wages: $18 × 25 h × 52 weeks | $23,400.00 |
| Social Security (6.2%) | $1,450.80 |
| Medicare (1.45%) | $339.30 |
| FUTA (0.6% of first $7,000) | $42.00 |
| State unemployment, illustrative 2.7% of first $10,000 | $270.00 |
| Workers' comp, illustrative $1.00 per $100 of payroll | $234.00 |
| Total before benefits | $25,736.10 |
That's 1.10× wages. Spread over the 1,300 hours worked, it's about $19.80 per hour. The two illustrative lines are placeholders. Your state's SUTA rate and wage base, and your insurer's workers' comp rate for the job class, will move the total.
Costs people forget
- Paid sick leave, where your state or city requires it. At 1 hour per 30 worked, this employee earns about 43 hours a year, though many laws let you cap how much is used each year. Hours they're paid but not working are a real cost.
- Payroll software or a payroll service, often a monthly base fee plus a per-employee fee.
- Training time: the first weeks of paid hours before they're fully productive.
- Overtime: non-exempt employees earn 1.5× their regular rate for hours over 40 in a workweek under the FLSA. Some states also count daily overtime.
Run your own numbers
The employee cost calculator starts at these same defaults ($18/hour). Change the hours to 25 and add your state's rate. The state guides list 2026 new-employer SUTA rates we checked.
FAQ
Do part-time employees cost the same payroll taxes as full-time?
Yes. Employer Social Security, Medicare, FUTA, and state unemployment are percentages of wages, so the rates are the same. Part-timers just earn lower wages. Benefits eligibility can differ by policy and law.