Payroll / Employee Cost Calculator (Employer Side) mechanism

Model scope

The supplied formula is an educational shortcut, not a generally correct fully-loaded payroll-cost algorithm. Verdict is FAIL because its unrestricted 7.65% FICA assumption and generic FUTA/SUTA treatment can materially misstate employer cost. The exact SUTA state, tax year, wage base, credit status, and overhead basis must be required inputs before presenting the result as a reliable estimate.

• The formula employer_FICA=7.65% of salary is not generally correct: employer Social Security is 6.2% only up to the annual Social Security wage base, while employer Medicare is 1.45% on all covered wages.
• FUTA is not a simple unrestricted percentage of salary: the standard federal taxable wage base is the first $7,000 per employee, and the commonly quoted 0.6% net rate assumes the full FUTA credit and no credit-reduction state.
• SUTA is state-specific and requires the applicable state taxable wage base, employer experience rate, and any state assessments; one generic FUTA/SUTA rate is insufficient.
• The formula does not specify whether overhead% applies to salary only, salary plus benefits, or total payroll cost. The test vectors assume overhead applies to base salary only.
• The claim of true fully-loaded cost is too broad unless additional employer costs such as workers compensation, paid leave, recruiting, equipment, severance, and employer-paid benefits are either included or explicitly excluded.
• The cost multiplier is undefined when salary is zero and requires an explicit division-by-zero rule.

Units and conventions

• Salary, benefits, taxes, and overhead are annual amounts in US dollars.
• Federal payroll-tax assumptions use calendar year 2024 values.
• Employer Social Security is 6.2% of covered wages up to the 2024 wage base of $168,600; employer Medicare is 1.45% of all covered wages.
• FUTA uses the standard 0.6% net rate on the first $7,000 of annual wages, assuming the employer receives the full 5.4% credit and is not in a credit-reduction state.
• SUTA examples use an explicitly assumed 2.70% rate on the first $7,000 of wages; no universal SUTA rate exists, so this must be replaced by the named state's actual schedule.
• Overhead is assumed to equal overhead_percent multiplied by base salary only.

Inspectable vector

One of 4 source-bound review vectors:

{
  "inputs": {
    "calendar_year": 2024,
    "base_salary_usd": 200000,
    "benefits_cost_usd": 30000,
    "employer_suta_rate": 0.027,
    "overhead_percent": 0.12
  },
  "expected_outputs": {
    "employer_social_security_usd": 10453.2,
    "employer_medicare_usd": 2900,
    "employer_fica_usd": 13353.2,
    "futa_usd": 42,
    "suta_usd": 189,
    "overhead_usd": 24000,
    "fully_loaded_annual_cost_usd": 267584.2,
    "cost_multiplier_on_salary": 1.337921
  },
  "reference_data": {
    "social_security_rate": 0.062,
    "social_security_wage_base_usd": 168600,
    "social_security_source_convention": "US Social Security Administration 2024 contribution and benefit base",
    "medicare_rate": 0.0145,
    "medicare_source_convention": "IRS/FICA standard employer Medicare tax rate",
    "futa_net_rate": 0.006,
    "futa_taxable_wage_base_usd": 7000,
    "futa_source_convention": "IRS standard FUTA rate after full 5.4% credit, assuming no credit reduction",
    "suta_rate": 0.027,
    "suta_taxable_wage_base_usd": 7000,
    "suta_source_convention": "Illustrative state unemployment-agency schedule; state is unspecified and 2.70% is not a universal standard"
  },
  "working": "Social Security = min(200000, 168600) x 0.062 = 168600 x 0.062 = 10453.2. Medicare = 200000 x 0.0145 = 2900.0. Employer FICA = 10453.2 + 2900.0 = 13353.2. FUTA = min(200000, 7000) x 0.006 = 7000 x 0.006 = 42.0. SUTA = min(200000, 7000) x 0.027 = 7000 x 0.027 = 189.0. Overhead = 200000 x 0.12 = 24000.0. Total = 200000 + 30000 + 13353.2 + 42.0 + 189.0 + 24000.0 = 267584.2. Multiplier = 267584.2 / 200000 = 1.337921."
}

Failure boundary

BREAK_CLAIMED · SELF_FLAGGED

A zero salary produces a valid total cost of zero but makes the cost multiplier 0/0, which is undefined. The instrument should reject that multiplier calculation or return an explicit undefined value. The overhead input also has a material percent-versus-decimal convention hazard.

Other records

Sources and evidence

These pointers bind the page to evidence. They do not grant authority or collapse verification into deployment.

• VERIFIED_LEDGER.json
• evidence-tranche7/tranche7-results.json
• BOUNDARY_HAZARD_CATALOG.json