Accountants Labour Cost (Monthly) Calculator
Estimate your total monthly labour cost, including wages, employer payroll costs, pension contributions and other employee expenses.
Overview
Use this monthly labour cost calculator to estimate the full cost of your workforce. Add employee numbers, average pay, working hours, employer payroll costs, pension contributions and regular employee expenses to see a more complete monthly staffing budget.
How it works
The calculator first estimates monthly gross wages by multiplying employee numbers, hourly pay, weekly hours and weeks per month. It then adds employer payroll costs and pension contributions as percentages of gross wages, plus any fixed monthly costs per employee. The combined figure is the estimated monthly labour cost. Dividing this total by employee numbers and paid hours produces average employee and hourly costs.
How to use this calculator
- 1Enter the number of employees you want to include.
- 2Add the average hourly gross pay rate.
- 3Enter average paid hours worked each week.
- 4Use 4.333 weeks per month for an annual monthly average.
- 5Add employer payroll, pension and other monthly employee costs.
- 6Review the total cost and average cost per employee or paid hour.
Example Calculation
Number of employees
5
Average hourly pay rate
$15
Average hours per week
37.5
Weeks per month
4.333
Employer payroll costs
14%
Employer pension contribution
3%
Other monthly costs per employee
$75
Total monthly labour cost
$14,609
For five employees paid an average of 15 per hour, the estimated monthly labour cost is about 14,470, including roughly 2,290 in employer on-costs.
Frequently asked questions
What is included in monthly labour cost?
This calculator includes gross wages, employer payroll costs, employer pension contributions and any other regular monthly cost entered for each employee.
Why is the full cost higher than gross pay?
Employers may also pay payroll taxes, pension contributions, benefits, insurance, equipment and other costs in addition to an employee's gross wage.
Why use 4.333 weeks per month?
There are 52 weeks in a year and 12 months, so 52 divided by 12 is about 4.333. This gives an annual average monthly estimate.
Should I include paid leave in the hourly rate?
If employees receive paid leave and the stated hourly rate does not already reflect its cost, include an appropriate allowance in other monthly costs or adjust the average rate.
Can I use this calculator for salaried employees?
Yes. Convert annual salary to an approximate hourly rate, or divide monthly salary by expected monthly paid hours, then add the relevant employer costs.
Does this include recruitment or redundancy costs?
No. These are usually irregular costs and are not included unless you add a monthly allowance under other costs per employee.
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Assumptions and warnings
Assumptions
- All employees are assumed to have the same average hourly pay rate and weekly hours.
- The calculation uses the selected weeks-per-month figure; 4.333 represents an annual monthly average.
- Employer payroll and pension costs are calculated as percentages of gross wages.
- Other costs are treated as a fixed monthly amount for each employee.
- The result is a budgeting estimate and does not include every possible employment-related cost.
Warnings
- This calculator provides a business budgeting estimate only and is not accounting, payroll, tax or financial advice.
- Payroll taxes, pension rules, thresholds and employer obligations vary by location and individual circumstances.