What Does an Employee Really Cost? Connecticut Payroll Cost Calculator (2026)

What it really costs to hire your first employee in Connecticut

An employee costs more than their paycheck. On top of wages, Connecticut employers pay several taxes and insurance costs, and they take on some admin work. For a typical $50,000 hire, plan on roughly 8% to 12% more than salary before any benefits.

Employer taxes

• Social Security and Medicare (FICA): you match the employee's 7.65%. That's 6.2% Social Security on wages up to $184,500 in 2026, plus 1.45% Medicare on all wages.
• Federal unemployment (FUTA): 6.0% on the first $7,000 of each employee's wages. Once you pay your state unemployment on time, you get a 5.4% credit, so the real cost is 0.6%, or $42 per employee per year. Connecticut is not a credit-reduction state for 2026.
• Connecticut unemployment (SUTA): new employers pay 1.9% on the first $27,000 of each employee's wages in 2026, up to $513 a year. After a few years, CT DOL assigns a rate based on your claims history, between 1.1% and 9.9% for 2026.

CT Paid Leave is withheld, not paid by you

Connecticut's paid family and medical leave program is funded by a 0.5% contribution taken out of employee wages, up to the Social Security wage base. If you have at least one employee, you must register with the CT Paid Leave Authority, withhold the 0.5% and send it in quarterly. The money comes out of your employee's pay, not your pocket, but missing the filings can bring penalties.

Workers' compensation insurance

Connecticut generally requires workers' comp as soon as you have one employee. Premiums are priced per $100 of payroll and depend on the job's risk class. Clerical work is cheap; roofing is not. Get a quote and enter your rate in the calculator.

Payroll software and admin

Payroll services calculate withholding, pay employees, file federal Forms 941 and 940, and file Connecticut withholding, unemployment and Paid Leave reports. Most small businesses pay $40 to $100 a month for one or two people. That's usually cheaper than paying a penalty for one missed deadline.

Before you hire

1. Register for CT withholding with DRS and for unemployment with CT DOL.
2. Collect Form W-4, CT-W4 and Form I-9 from the new hire, and report them to the CT New Hire Reporting program.
3. Set up workers' comp, then run a test payroll before the first payday.

Thinking about hiring a contractor instead? Make sure the role really qualifies; misclassification is expensive. We can help you set up payroll the right way from day one.