Gross salary in costs per hour, a calculation

This article is to make an estimation of the hourly costs of an employee, to be able to compare this against paying an external person per hour. 

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Introduction:

Below we do example calculations of what a payroll employee actually costs per hour.

Variables we included will vary, but roughly, these figures is what it comes down to. 

Having estimated the actual total costs of an employee, we calculate how many hours an employee actually works, finally giving us the estimated hourly costs. 

Having this figure available makes it easier to estimate if outsourcing to a 'pay per hour' would compare OK financially. 

After building the figures also a rule of thumb appears, making it easier in day to day life to roughly do a manual conversion of gross salary versus hourly costs. We divide the gross monthly salary by 100 and add 1/3 to it. Giving the hourly equivalent.

For instance, a gross Dutch salary of € 4.500 euro's per month would roughly mean an hourly cost of € 60,- euro's for that employee. 

Find some calculations and comparisons below!

Summarized table of gross monthly towards the hourly equivalent costs

Gross salary per month Estimated hourly costs
3000 40
4500 60
6000 80

 

3 Example calculations of employee costs, calculated down to an estimated price per hour: 

 

Employer's costs (fulltime)

 

 

 

 

 

Gross salary 

3000

 

4500

 

6000

Employer charges 33%

990

 

1485

 

1980

Holiday pay 1 month / 12

333

 

499

 

665

Bonus 13e month

333

 

499

 

665

Pension 15 %

450

 

675

 

900

Education and trips

400

 

400

 

400

Car / public transport / travel

350

 

350

 

350

Office space

400

 

400

 

400

Phone

30

 

30

 

30

Laptop (1600 / 36)

44

 

44

 

44

Software licenses, O365, Jira, etc.

50

 

50

 

50

Total monthly costs:

6379

 

8932

 

11484

 

 

 

 

 

 

Worked hours:

 

 

 

 

 

52 weeks x 5 days

260

 

 

   

Sick days/year

-10

 

 

 

 

Holiday

-22

 

 

 

 

Bank holidays (Christmas, etc)

-7

 

 

 

 

Worked days/ year

221

 

 

 

 

Worked hours / month

147

 

 

 

 

 

 

 

 

 

 

HOURLY COSTS calculated:

THUMBRULE: SAL/100 + (1/3)

43

40

 

61

60

 

78

80

 

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