How much does it cost to hire in the US?

Get an idea of the associated costs of hiring in the US.

Dollar bills rolled up in a line.

Bringing in a new employee to your organization is exciting, but it can also be more costly than you might expect. In addition to budgeting for the new joiner’s salary and benefits, you also have to account for various other factors that can increase your total cost of hiring, such as employment taxes, training expenses, and equipment fees. 

Before you proceed with a new hire, it’s important to have a good idea of how much you’ll have to spend. Keep in mind that these costs will vary depending on the country. In this article, we’ll break down the expenses involved for hiring someone in the U.S.

Costs to account for during the hiring process

The average cost to hire an employee in the U.S. is around $4,700. Your actual costs to hire a new employee may be higher or lower than this figure, depending on the details of the position and other factors. 

Beyond employee compensation, some of the costs you may have to account for in the hiring process include:

  • HR team efforts
  • Candidate screening and background check fees
  • External recruiters
  • Training
  • IT equipment
  • Job ad fees
  • Signing bonuses
  • Referrals
  • Mandatory employer costs, like employment taxes

The longer it takes to hire an employee, the more expensive the process becomes. Along the same lines, the more training your new hire will need, the more you’ll have to spend in total hiring costs. Try to estimate these costs upfront, so you can budget accordingly and ensure that you’re spending wisely during the hiring process. 

You can use an employee cost calculator to get a general idea of your total hiring costs. Use Oyster’s guide to hiring in the United States to estimate your employment costs for a new U.S. employee.

Interested in Oyster but want more information about how the platform works? This product overview should help.

How much do hiring costs vary in different states?

Average hiring costs vary significantly from state to state. If you’re hiring for a minimum-wage position, for instance, you’d have to pay more to hire someone in Washington—the state with the highest minimum wage in 2023—than in any other state. Generally, employers in states with a higher cost of living will have to spend more on employee compensation. 

Some states also charge more than others in employment taxes, which increases the hiring costs for employers. In Georgia, for example, the employer’s total cost of employment for a worker with a gross annual salary is $100,000 would be $123,999. In New York, the employer’s mandatory costs are lower. The total cost of employment for the same worker would be $117,984, which is around $6,000 less. 

Compare the cost of hiring in different states to make informed choices about your business.  

What about the cost of hiring internationally?

Generally, hiring an international employee is more expensive than hiring an employee from your country. Employers often encounter additional legal fees, which may include immigration filing fees for in-person workers, when they hire a foreign employee to work in their organization. That’s in addition to the standard costs of hiring a new worker, like recruitment and onboarding. 

If you plan to hire internationally to take advantage of benefits like exploring new markets and expanding your talent search, you have to keep these factors in mind:

  • Work visas: Foreign employees you bring to the U.S. will need a work visa, which can cost around $5,000
  • Mandatory employer costs: Wherever you hire an international employee, your organization will need to comply with local labor laws, including mandatory employer costs, like paid time off and employer taxes. 
  • Local currency: The strength of your new hire’s local currency relative to the U.S. dollar will influence your hiring costs. 

You may decide that managing all these details when hiring internationally is too time-consuming and complicated. In that case, you can turn to an employer of record (EOR), an organization that acts as the legal employer of your international employees and handles certain responsibilities—like compliance and payroll—for you. Just keep in mind that you’ll have to pay an EOR management fee (typically around 20% of your hiring costs) if you choose to work with an EOR. 

Oyster enables you to hire in countries all over the world. Check out our global employment costs calculator to find out if you could save money by hiring a remote employee in another country.

About Oyster

Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.

Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.

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