Where the loaded-labour multiplier actually comes from

01 · TrueTools, a free employee-cost calculator for the US — 2026-03-17. “A widely cited benchmark in HR and business finance is that a full-time employee costs between 1.25 and 1.40 times their base salary.”

02 · Sunbytes, an offshore engineering-team provider — 2026-06-03. “That figure comes from the US BLS Employer Costs for Employee Compensation series, which tracks the breakdown across roughly 380,000 employer observations.”

03 · U.S. Bureau of Labor Statistics — 2026-06-12. “Wages and salaries averaged $32.60 per hour worked and accounted for 69.9 percent of employer costs, while benefit costs averaged $14.01 per hour worked and accounted for the remaining 30.1 percent.”

04 · U.S. Small Business Administration — 2019-08-22. “There’s a rule of thumb that the cost is typically 1.25 to 1.4 times the salary, depending on certain variables.”

05 · BeeBole, a timesheet product, in a real-cost-of-an-employee guide — 2018-11-29. “According to Hadzima, once you have taken into consideration basic salary, taxes, and benefits, the actual costs of your employees are typically somewhere between 1.25 and 1.4 times the base salary.”

06 · Joseph G. Hadzima Jr., MIT Sloan School of Management, in the column Starting Up: Practical Advice for Entrepreneurs — undated. “The costs to this point (basic salary, employment taxes and benefits) are typically in the 1.25 to 1.4 times base salary range- e.g. the cost range for a $50,000/year employee might $62,500 to $70,000.”

Almost every published calculator for the cost of an employee works the same way: take a wage, apply a multiplier, present the result as what the person actually costs. The multiplier is treated as a known quantity, the sort of thing a reader could look up if they cared to. It does have an origin, and this page followed it there through the documents that carry it. The origin is a monthly advice column for entrepreneurs, written by a senior lecturer at the MIT Sloan School of Management and reprinted on an MIT server under his own copyright, and it contains no measurement of any kind.

The column is better than most of what quotes it. It says exactly what the range covers — basic salary, employment taxes and benefits — and then goes on to count office space, furniture, computers and telephones separately, as costs a reader has to add afterwards. Restatements routinely fold equipment and overhead back inside the same multiplier, which produces a larger number attributed to a document that deliberately excluded those things. The column also carries its own warning, in a passage about a different entrepreneur's home-made metric: a rule of thumb is useful for planning, and its underlying assumptions need recalibrating periodically.

The figure most people actually quote is a single number rather than a range, and that number is not in the column. It is a midpoint, and not of the column's range: the upper bound in general circulation is higher than the upper bound the column states, and no document found in this trace measured anything to move it. So the point figure is the middle of a range that drifted upward, presented as a value in its own right. The drift is invisible from the outside because the bottom of the range never moved, which makes the two ranges look like the same range quoted loosely.

Two of the documents between a reader and the origin attribute the range to the federal statistical agency, one of them with a sample size attached. The agency does publish a figure in this territory and it is a different statistic: benefit cost as a share of total compensation, which has the wage inside its denominator rather than underneath it. A share of total compensation and a markup on a wage are not the same quantity, and neither converts into the other without knowing exactly what each one counts. The page that supplies the sample size also prints, further down, its own implied multiplier from the agency's data — and that figure falls outside the range it has just attributed to the agency. Nothing on the page reconciles the two.

So the honest position is that the range is usable with its limits attached, and the point figure is not usable at all. The range is a planning heuristic from a named author who presented it as one, for salaried roles in rapidly growing high-technology companies, covering wage, employment taxes and benefits and nothing else. It is not a measurement, it is not the statistical agency's, and it is not about a small trade or service business — a population where workers' compensation alone is priced by state and by class of work and can move the answer by more than the whole width of the range. If the number matters to a price you are about to set, quote the column with its scope attached, or compute the statutory floor from your own payroll and treat everything above that as your own arithmetic.