Employer on-cost: what the number you were quoted probably leaves out

You ask two providers what it costs to employ the same person in the same country on the same salary. One says the on-cost is modest. The other says it is a good deal more. Both are confident. Neither is lying. They are answering different questions, and until you know which question each one answered, the quotes cannot be compared.

This is what sits above gross salary, why it moves, and how to line quotes up so you are comparing the same thing.

What sits above gross salary

Employer on-cost is everything you pay to employ someone that does not land in their bank account as salary. In most countries it has seven parts.

• Employer social contributions. Pension, health, unemployment, accident and similar funds, paid by the employer on top of the gross. This is the largest line nearly everywhere and the one that varies most between countries. Many systems cap it at a salary ceiling, so the effective rate falls as pay rises.
• Mandatory bonuses. A thirteenth month is standard in a large number of countries, a fourteenth in some. Where it applies it is not discretionary. It is salary paid on a different schedule, and it needs to be in the annual number.
• Leave accrual. Statutory annual leave is paid time you are funding whether or not it is taken. Some countries pay a leave allowance on top of salary during holidays, and untaken leave is a liability that crystallises on exit.
• Insurance. Mandatory work injury cover, private medical where the market expects it, and life or disability cover required by law or collective agreement.
• Levies. Training levies, apprenticeship funds, housing funds, skills development charges and similar payroll taxes that are not social security but are payable by the employer.
• The EOR fee. A flat monthly amount per employee if you are using an Employer of Record, or the cost of your own entity, payroll provider and filings if you are not.
• FX. The employee is paid in local currency. If your budget is in another one, the conversion moves every month, and some providers add a margin on it.

Salary is the base. The fully loaded cost is the base plus all seven. A market that looks cheap on salary can be mid table once the seven are counted, and a market that looks expensive can be closer than it appears because contributions are capped.

Why quotes differ

Four things explain nearly every gap between quotes for the same hire.

Statutory only versus fully loaded. Many quotes include the employer contributions the law requires and stop there. Others include mandatory bonuses, leave, insurance and the fee. A "statutory only" figure is not wrong, but it is not the cost of employing the person, and it will be the smaller of the two.

Caps and ceilings. Where contributions stop at a salary ceiling, the effective rate depends on the salary. A quote at one salary does not scale linearly to another. Two providers quoting a percentage may be quoting it at different points on the curve.

Thirteenth and fourteenth month. Some quotes express the on-cost as a percentage of twelve months of salary and treat the thirteenth as a separate line. Others fold it into the base before calculating contributions, because in many countries contributions are due on it too. Same person, different arithmetic, different number.

Regional variation. In several countries the contribution rate, a levy or a mandatory benefit depends on the state, province or city where the employee works. A national average can be wrong for the actual person in either direction.

The cost sections of the Brazil, France and India guides show three different shapes: one where mandatory bonuses and funds dominate, one where contributions do, and one where the answer depends heavily on the salary level.

How to compare quotes like for like

• Fix the inputs. Same country, same city, same gross annual salary, same start date, same role. Change any of these and you have a different hire.
• Ask for the annual total, not a percentage. Percentages hide caps and bonuses. An annual invoiced amount does not.
• Ask what is passed through and what is marked up. Statutory costs should be passed through at cost and itemised. The fee should be visible as a fee. If the two are blended into a single percentage of salary, you cannot see either.
• Ask how the thirteenth month is treated. In the base, or as a separate line. Either is fine, as long as both quotes do the same.
• Ask about year one costs. Onboarding fees, equipment, deposits and setup are real but not recurring. Keep them out of the monthly comparison and compare them separately.
• Ask what the exit costs. Accrued leave, notice and statutory severance are part of the cost to employ someone even though they land at the end. A quote that ignores them is quoting the cheap half.

The employment cost calculator is built on these rules. It asks for the inputs above and shows the components separately, so you can see where a provider's number diverges from it. The glossary defines each line in plain terms if a term on a quote is unfamiliar.

Why Dryft shows ranges and marks unverified figures

You will notice two things in our country guides that other sites tend not to do. Cost figures are often shown as ranges, and some statutory figures carry a "pending verification" mark.

The ranges are honest. The fully loaded cost of a hire depends on salary level, region, sector, collective agreement and the benefits the market expects, and a single percentage that ignores those is precise without being accurate. A range with the drivers named tells you what to check for your specific hire. A single number tells you what somebody's spreadsheet said on the day.

The marks are honest too. Statutory rates change, sometimes annually, sometimes mid year. A figure that we have not yet confirmed against the primary authority for the current period is labelled as such rather than presented as settled. When we confirm it, the label comes off. When it changes, the guide is updated. We would rather you saw the uncertainty than trusted a number that is out of date, because a wrong on-cost figure does not show up until the first payslip, and by then the hire has been approved on the wrong basis.

When you ask us for a quote, you get an itemised annual total for the actual person, in the actual city, at the actual salary, with statutory costs passed through at cost and the fee shown as a fee. That is the number to compare, and it is the number global payroll will invoice.

This article is general information, not legal, tax or immigration advice. On-cost components, rates and ceilings differ by jurisdiction and change regularly. Confirm the position for your countries with a qualified adviser before acting. Last reviewed September 2026.

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