How Much It Actually Costs to Hire an Employee in California

When considering hiring a new employee, benefits, legal obligations, wages and taxes are always significant factors. How much will it cost to hire an employee in California? 

In this blog post, we’ll break down the costs associated with hiring an employee in California. We’ll also look at both the taxes paid by the employee and the taxes paid by the employer.

By understanding these costs, you can make an informed decision about whether or not hiring a new employee is a right for your business.

Hiring employees in California: What Can You Expect? 

Hiring a new employee in California can be a challenging experience, especially if your business grows and expands. Moreover, the cost of hiring employees in the Golden State may shock you.

“Aside from the wages you plan to pay them, you’ll need to consider additional expenses like recruiting candidates, training costs, payroll taxes, other hiring costs, and more,” says Shelbie Watts.

Undoubtedly, hiring new employees is something essential for the profitability of any small business in the US. This explains why you need to know the average cost per hire and all statistical information associated with this issue.

Cost per hire, time to hire, and other recruitment statistics in California 

Here is the current statistical information about the average cost per hire and time to hire in California in 2022: 

• The average cost per hire in the US is $1,633. Also, for executive and non-executive positions, vacancy costs are about $98 per day.
• The average time to hire in California depends on the industry. For instance, the average time to hire in construction is 12.7 days. Also, the average time to hire in financial services is 44.7.    
• Additionally, the average cost of training for small companies is $1,105. In California, the average time to hire is about 23.7 days.
• The minimum wage for summer help, which includes salaries and taxes, is $15,689. 
• The cost of hiring an entry-level office manager is $54,154, including salaries and taxes like Social Security and Medicare.

In this video, you can learn more about how to hire employees in California correctly. 

What Are the Costs of Hiring an Employee in California?

According to Maithili Mokashi, small business owners must be extra careful when it comes to employing staff in California.

“It’s true that your new hire will help you make money and bring skills to the table that will help you. However, you need to carefully calculate whether you can afford to pay their wages as well as the other costs associated with them,” affirms Mokashi.

These costs of hiring employees in California are mainly associated with wages. As a business owner, you’re responsible for paying payroll-related taxes, benefits, and miscellaneous costs of recruiting and training. Also, there are taxes paid by the employee, which are withheld from wages.

Here we present you a list of taxes paid by you as a business owner and an employee.

Taxes paid by the employer in California

• California Unemployment Insurance
• Employment Training Tax
• Social Security Tax
• Medicare Tax
• Federal Unemployment Tax

Taxes paid by the employee in California

• California Personal Income Tax
• Federal Income Tax
• Additional Medicare Tax
• Medicare
• Social Security tax
• State Disability Insurance Tax

How Can You Reduce the Cost of Hiring Employees in California? 

Outsourcing can be understood as the process of hiring remote workers to perform a task or provide a service that employees typically perform within an organization. In most cases, outsourcing is used to save money on labor costs. 

Similarly, if a company needs employees with specialized skills, it may outsource the work to remote employees instead of hiring full-time staff. 

There are many benefits to outsourcing employees in California. First, it can help to reduce labor costs. By outsourcing employee positions, businesses can avoid the high costs associated with hiring and training workers in California.

Furthermore, outsourcing can help to improve productivity. Outsourcing employees means that businesses can focus on their core competencies and leave the non-essential tasks to outsourced workers. 

Finally, outsourcing can help to improve employee retention. By outsourcing employees, businesses can provide their workers with more career growth and development opportunities. As a result, employees are more likely to stay with the company for longer.

Ultimately, outsourcing should be based on the business’s specific needs. However, many benefits make outsourcing an attractive option for businesses in California.

If you want to adopt a hiring strategy based on outsourcing for your business, our company can help you hire remote workers without legal risks or long-term commitment. You’ll gain access to leading talent and a unique skill set without the hassle of working in different time zones.