Updated November 1, 2026 for the 2026 tax year
The costs on top of wages
| Cost | 2026 rate | Applies to |
|---|---|---|
| Social Security (employer share) | 6.2% | Wages up to $184,500 |
| Medicare (employer share) | 1.45% | All wages |
| Federal unemployment (FUTA) | 0.6% after state credit | First $7,000 per employee |
| Missouri unemployment, new employer | 2.376% | First $9,000 per employee |
| Workers' compensation | Varies by job class | Wages |
Missouri's new-employer unemployment rate and wage base come from the Missouri Department of Labor. After a few years your state rate is based on your own history.
Workers' comp is the big unknown
Workers' comp is priced by job type. Office work is cheap; trades, installers and drivers cost much more. Get a quote from your insurance agent and enter it as a percent of wages.
Will the hire pay for itself?
The calculator divides the total cost by your gross margin. If you keep 45 cents of each sale after materials, a $55,000-a-year employee needs to help bring in about $122,000 in extra sales before the hire adds profit. If the person frees up your time to sell or take bigger jobs, count that too.
Other first-time-employer steps
- Register for Missouri withholding and unemployment tax accounts.
- Collect a W-4 and I-9 from the new hire, and report the hire to the state.
- Set up payroll so taxes are withheld and filed on time.
Common questions
How much does an employee really cost?
Often 10% to 30% more than their wages once payroll taxes, unemployment insurance, workers' comp and benefits are added. Enter your numbers above for a specific figure.
What is Missouri's unemployment tax rate for new employers?
For 2026, 2.376% for most new employers, on the first $9,000 of each employee's wages.
Is it cheaper to use a 1099 contractor?
It can be, but only if the work truly fits contractor rules. Misclassifying an employee can lead to back taxes and penalties.
Sources: IRS Publication 15 (Circular E) and Form 940 instructions; Missouri Department of Labor, 2026 wage base and new employer rate.