ABSTRACT
Many managers underestimate the cost of hiring a new employee. Before you hire a new employee, understand that the cost of doing so will far exceed the employee's hourly rate. In 1996, for example, the minimum wage was $4.75. Across the country, however, the average hourly cost per employee was $18.82 (U.S. Department of Labor, 1996). Table 8 lists payroll items you must consider before you hire an employee. Factors Contributing to an Average $18.82 Per-Hour Cost of Compensation https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">
Factor
1996 Dollar Amount
Percentage
Total compensation
$18.82
100.0%
Wages and salary
$13.48
71.6%
Legally required benefits
$1.59
8.5%
Insurance
$1.29
6.9%
Paid leave
$1.24
6.8%
Retirement
$0.75
4.0%
Supplemental pay (overtime)
$0.44
2.4%
Other
$0.13
0.6%
