Free toolkit for trade owners

See the true cost of an employee.

A $20-an-hour helper does not cost $20 an hour. FirstHire adds employer payroll taxes, unemployment taxes, a workers' compensation estimate, and payroll software — using published 2026 IRS, SSA, and state figures.

Free, no signupRuns in your browser. No account required.
Sourced from IRS, SSA, and state data2026 federal rates and DOL state unemployment tables.
Built for tradesPlumbers, electricians, HVAC, landscapers, and cleaners.

The calculator

True cost of your first hire

Enter a wage, hours, and state. Results update as you type. You can copy a shareable link or print the breakdown.

Hours over 40 are counted at time-and-a-half under the federal FLSA overtime rule (W-2 model).

Optional benefits and other costs

Already included in annual wages; used to show cost per productive hour.
Uniforms, tools you provide, training, or other add-ons.
Default is Gusto's publicly listed Simple plan for one employee: $49/month plus $6 per person, or $660 a year. Paychex does not publish a comparable public price; replace this if you use another provider.

Need the official steps after you pick a number? Jump to the checklist or read how to run payroll for one employee.

How it works

Three steps to a number you can plan around

Enter the offer

Start with the hourly wage, weekly hours, state, and trade. Hours over 40 use the federal overtime rule in the W-2 model.

Review the extras

We add employer FICA, FUTA, state unemployment, a workers' comp estimate, and optional benefits. Edit any rate to match your notice or quote.

Hire with a checklist

Use the official EIN, I-9, W-4, new-hire, withholding, unemployment, workers' comp, payroll, and poster steps — and save your progress on this device.

Do this in order

First-hire checklist

Core federal and typical state steps when you put a W-2 employee on the payroll. Links go to official government pages. Your progress is saved in this browser only.

0 of 8 complete
  1. Step 1

    Get an Employer Identification Number (EIN)

    Apply for a free EIN with the IRS before you run payroll or file employment tax returns.

    Apply for an EIN (IRS) · EIN overview (IRS)

  2. Step 2

    Register for state withholding and unemployment tax

    Most states require withholding and SUTA registration when you hire. In Indiana, withholding is through DOR and unemployment tax through DWD. Employers generally pay Indiana SUTA on the first $9,500 of each employee's wages; a typical new-employer rate is 2.50%.

    Indiana withholding (DOR) · Indiana unemployment for employers (DWD) · Indiana rate computation (DWD)

  3. Step 3

    Collect Form W-4 and complete Form I-9

    Have the new hire complete Form W-4 when they start. Use Form I-9 to verify identity and work authorization for every person you hire in the United States, including U.S. citizens.

    Form W-4 (IRS) · Form I-9 (USCIS) · Hiring employees (IRS)

  4. Step 4

    Report the new hire

    Federal law requires reporting new and rehired employees to the state directory. Indiana requires electronic reporting within 20 days of the hire or rehire date (IC 22-4-10-8). Failure to report can bring a $25 fine per employee, or more if a conspiracy is found.

    Indiana new-hire reporting (DWD) · Indiana New Hire Reporting Center · Federal new-hire reporting (ACF)

  5. Step 5

    Get a workers' compensation policy

    Indiana law requires most employers to carry workers' compensation insurance or obtain Board approval to self-insure (IC 22-3-5-1). The Board says most businesses must have coverage and that an injured employee is covered from the first day on the job. Rates vary by class code and carrier; do not treat this site's estimate as a quote.

    Indiana Worker's Compensation Board · WCB compliance · Who is eligible (WCB) · Independent contractor clearance (DOR)

  6. Step 6

    Set up payroll

    Withhold employee income tax and the employee share of FICA, pay the employer share of FICA (6.2% Social Security up to the 2026 wage base of $184,500, plus 1.45% Medicare on all wages), and deposit FUTA and SUTA. IRS Publication 15 is the employer's tax guide.

    Publication 15 (IRS) · Topic 751 (IRS)

    Partner links. Compare current features and pricing yourself; Paychex does not publish a public dollar price on its comparison page.

    Compare payroll options in our free Gusto vs Paychex guide, or read how to run payroll for one employee.

  7. Step 7

    Post required labor notices

    Federal and state employment-law posters must be displayed where employees can see them. Use the U.S. DOL FirstStep Poster Advisor for free federal posters. Indiana employers must also display the unemployment insurance poster from DWD.

    Workplace posters (U.S. DOL) · FirstStep Poster Advisor · Indiana required UI poster (DWD)

  8. Step 8 — if you need them

    An operating agreement, hiring letter, or contractor-versus-employee review is legal work, not something this calculator can do.

    Partner links. This is not a substitute for an attorney licensed in your state.

    Legal documents are work for an attorney licensed in your state. This checklist is not a substitute for that advice.

If you are outside Indiana, use your state workforce agency and tax department. Start with the U.S. DOL Office of Unemployment Insurance state law page.

Tools we recommend

Payroll, legal, and a domain — with honest limits

These are optional partner links. We only repeat prices and claims we could verify on official public pages.

Payroll

Gusto

What we could verify: Public Simple plan is $49/month plus $6 per person (November 9, 2026 pricing page). Month-to-month, unlimited payroll runs, one-state payroll on Simple.

Consider: Higher tiers cost more; add-ons are priced separately.

See Gusto

See official pricing on Gusto's site, or read our Gusto vs Paychex guide.

Payroll

Paychex

What we could verify: Official comparison page describes Basic, Foundations, Advanced, and Complete packages, including tax filing and payroll processing.

Consider: No official public dollar price on that page. Ask for a written quote.

See Paychex

Ask Paychex for a written quote, or read our Gusto vs Paychex guide.

Legal

LegalZoom

Useful for: Entity documents or standard hiring paperwork if you want a starting point.

Consider: Not a substitute for an attorney licensed in your state, especially on worker classification.

See LegalZoom

For entity or hiring documents, talk to an attorney licensed in your state.

Website

Domain.com

Useful for: Registering a domain if you want a simple web presence for the business.

Consider: Compare registrars and renewal prices before you buy. We did not audit Domain.com pricing for this page.

See Domain.com

Compare domain registrars and renewal prices before you buy.

Some of these are partner links. See the affiliate disclosure.

FAQ

Common questions

How much does a $20-an-hour employee really cost?

In our worked Indiana plumbing example at $20 an hour and 40 hours a week, 2026 employer FICA, FUTA, typical new-employer SUTA, the Indiana ICRB minimum workers' comp premium for class 5183, and a public Gusto Simple plan price bring the annual employer cost to $46,172.90, or about $22.20 per paid hour. Change the wage, state, or benefits in the calculator; treat the result as an estimate, not a quote.

Is FirstHire free, and do I need an account?

Yes. The calculator and checklist are free and run in your browser. You do not need to create an account. Calculator inputs are not sent to a server.

Where do the tax rates come from?

Federal FICA and the 2026 Social Security wage base come from IRS Publication 15, IRS Topic 751, and the Social Security Administration. FUTA comes from IRS Form 940 guidance. State unemployment wage bases and new-employer rates come from the U.S. DOL January 2026 table, with Indiana also confirmed by DWD. Indiana workers' comp defaults are ICRB advisory rates effective January 1, 2026. Full links are in Sources below.

Can I pay a helper as a 1099 contractor instead?

Only if the worker is actually an independent contractor under IRS common-law rules and, for wage-and-hour purposes, the DOL economic reality test. A 1099 form or contract label is not enough. The calculator's 1099 toggle only shows the same hourly rate with no employer payroll taxes; it is not a classification decision. Read the 1099 vs W-2 guide.

Stay in the loop

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Sources and assumptions

Figures on this site were checked against official or primary public sources in November 2026. They are planning estimates, not tax, legal, or insurance advice, and not a quote from any carrier or payroll company.

  • Employer FICA, 2026: 6.2% Social Security on wages up to $184,500, plus 1.45% Medicare on all wages (7.65% combined below the Social Security cap). Sources: IRS Publication 15 (2026), IRS Topic 751, SSA taxable maximum FAQ, SSA 2026 COLA fact sheet.
  • FUTA: Statutory rate 6.0% on the first $7,000 of wages, with a typical 5.4% credit, for a net 0.6% ($42 per employee when wages exceed $7,000). Credit-reduction states may owe more. The IRS finalizes the credit-reduction list after November 10 of the tax year. Sources: Instructions for Form 940, IRS FUTA credit reduction.
  • SUTA wage bases and new-employer rates: U.S. DOL ETA, Significant Provisions of State Unemployment Insurance Laws, January 2026. Indiana's $9,500 wage base and typical 2.50% new-employer rate are also stated by Indiana DWD. Seven states are listed as industry-average rates only (Louisiana, Minnesota, Montana, New Mexico, Utah, Washington, Wyoming); this calculator does not invent a default for those states.
  • Workers' compensation: Indiana defaults are ICRB / NCCI advisory rates effective January 1, 2026 (class 5183 plumbing $0.924, 5190 electrical $0.901, 5537 HVAC $1.236, 0042 landscape $2.097, 9014 contract building operations / janitorial $1.203, each per $100 of payroll, with the filing's minimum premiums). These are advisory rates, not a binder. For any other state, replace the default with a local quote.
  • Payroll software default: Gusto Simple plan, gusto.com/product/pricing (fetched November 9, 2026): $49/month plus $6 per person, or $660 a year for one employee. Paychex does not publish a numeric price on its official comparison page.
  • Overtime: Hours over 40 in a workweek are counted at 1.5× the regular rate in the W-2 model, following the federal Fair Labor Standards Act.

Estimates, not tax advice. Your assigned SUTA rate, FUTA credit, workers' comp class code, and benefits will differ. Confirm numbers with your accountant, state agencies, and insurance carrier before you hire or file a return.