Despite fears of a recession in America, the US labor market created 372,000 new jobs in June 2022. While hiring new talent can seem like a daunting expense, how much does it actually cost to hire a new employee in America?
So, how much would it cost you to hire a new employee?
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America's Top 10 Most Expensive States To Hire A New Employee
America’s Top 5 Least Expensive States To Hire New Employees
According to the research:
Alaska is the most expensive state to hire a new employee, costing $18,991 every year. Interestingly, the majority of this cost is health insurance, which accounts for over a third of employee expenses.
The state of New York is the second most expensive state to hire a new employee, costing $18,946 per year.
On the other end of the spectrum, employers in The Magnolia State of Mississippi, have the lowest annual cost per employee at $12,273 a year, as the state has the lowest average income, making federal taxes cheaper for employers.
Further findings from the study:
- Massachusetts is America's most expensive state for everything from social security and Medicare to federal unemployment tax and average retirement plan contributions; with employers contributing a combined $12,144 annually, per employee on these costs alone.
- New Jersey is America's most expensive state for disability insurance tax, with employers paying $940 annually per employee.
- Employers in Hawaii are paying America’s highest state unemployment tax of $1,422 annually per employee.
- Healthcare in Alaska is the most expensive in the country, with health insurance contributions from employers amounting to $7,301 annually. Interestingly, Alaska has a very wide margin compared to the rest of the country, with employers paying over $800 more than New York in second place.
Tipalti’s employee cost calculator is a useful tool to see the average cost of an employee in your state. See the calculator here.
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