The True Cost of an Employee (It's More Than Salary)
An employee costs far more than their salary. Here's how to add benefits and overheads to find the real annual, monthly, and hourly cost — and why it matters for pricing.
Salary is only the start
The salary on the contract is just one part of what an employee actually costs. Add benefits and overheads and the fully loaded cost is often 1.2 to 1.4 times base pay. The free Employee Cost Calculator brings it all together.
What to include
- Salary — base annual pay.
- Benefits — insurance, end-of-service gratuity, bonuses, allowances.
- Overheads — workspace, equipment, software, and tools that make the role possible.
True hourly cost
Divide the total annual cost by actual working hours (working days × hours per day). This "true hourly cost" is essential for quoting projects and pricing services — bill below it and you lose money on every hour sold.
Why it matters
Underpricing labour is one of the most common ways service businesses quietly lose money. Knowing the real cost lets you set rates that actually cover it, with margin on top. For UAE-specific costs, pair this with the UAE Salary Calculator and Gratuity Calculator.
Use the free Employee Cost Calculator | UAE Salary Calculator