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12 Examples of Employee Costs

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Employee costs are the total costs associated with employing an individual. Depending on the nation, industry and profession the total costs of employing someone can exceed twice their salary. The following are common types of employee cost.
Base salary
Overtime pay
Stock options
Stock purchase plans
Medical coverage
Payroll taxes
Social security
Worker's compensation insurance
Retirement plan contributions
Paid time off
Maternity/Paternity leave
Training & development
Education assistance
Recruitment costs
Employee assistance programs
Employee recognition programs
Childcare assistance
Commuter benefits
Employee discounts & merchandise
Safety gear
Office space
Office furniture & fixtures
Cafeteria & meal programs
Employee expenses
Business travel
Remote working expenses
Employee parties, meals & events
Relocation assistance
Housing allowances
Office perks
Employee parking expenses
Employee technology & equipment
Severance packages
HR costs
HR compliance costs

Recruiting Costs

The direct costs of recruiting an employee.

Human Resources

The cost of human resources overhead divided by the number of employees. This captures cost related to compliance and administration of employment.


Annual salary or hourly wage.

Payroll Taxes

Payroll taxes and social security payments that are paid by the employer based on the employee's salary such as pension, unemployment insurance, medical insurance, disability insurance, maternity and child benefits. These differ greatly by nation, state or province.


Benefits that are paid by the employer such as medical insurance, disability insurance, dental insurance, life insurance and pension.


Incentives such as profit sharing plans, bonuses and stock options.

Paid Leave

Paid time off including public holidays, vacation, sick days, personal days, bereavement leave, maternity and paternity leave.

Training & Development

Training and development programs including the cost of onboarding.

Office Space

Costs related to office space per employee such as rent and facility management costs.


Office consumables such as coffee, food and stationery.


Insurance attributable to employees such as employee liability insurance.


Furniture, fixtures and equipment such as computers and mobile phones.


The following are common employee costs.
Overview: Employee Costs
The total costs associated with employing an individual.
Related Concepts
Next: Employee Benefits
More about business costs:
Applied Cost
Business Equipment
Capacity Cost
Capital Improvement
Carrying Costs
Closing Costs
Cost Of Capital
Cost Of Revenue
Cost Of Living
Direct Cost
Distress Cost
Fixed Costs
Friction Cost
Employee Costs
Holding Costs
Intangible Cost
Marginal Cost
Operating Cost
Operating Expenses
Legacy Costs
Outlay Cost
Lifetime Cost
Overhead Costs
Menu Costs
Relevant Cost
Normal Costs
Sunk Costs
Tangible Cost
Operational Costs
Travel Expenses
Unit Cost
Opportunity Cost
Variable Costs
Prospective Cost
Semi Variable Cost
Step Costs
Switching Costs
Transaction Costs
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