How is total cost calculated for pay runs?
The total cost of a pay run includes net pay, employee and employer taxes, deductions and contributions, and reimbursements:
Total Cost = Gross Pay + Contributions + Employer Taxes + Reimbursements
For example, consider a pay run with two employees (with no contributions):
| Gross Pay | Deductions | Employee Taxes | Employer Taxes | Net Pay | Reimb. | Cost to Employer | |
|---|---|---|---|---|---|---|---|
| Worker 1 | 5000 | 300 | 1606.18 | 552.25 | 3093.82 | 100 | 5652.25 |
| Worker 2 | 3000 | 200 | 854.75 | 329 | 1945.25 | 50 | 3379 |
| Totals | 8000 | 500 | 2460.93 | 881.25 | 5039.07 | 150 | 9031.25 |
| 8000 | + | 881.25 | + | 150 | = | 9031.25 |
However, the actual amount withdrawn to pay the run may be less, especially if some employees are paid by check. Learn more.