Guide

How much does it cost to hire your first employee as a plumber?

· Last updated Nov 2026 · Figures are estimates, not tax or insurance advice.

If you are a one-person plumbing shop, the wage you offer is only part of the bill. Employer payroll taxes, unemployment taxes, workers' compensation, and the cost of running payroll all sit on top of the check you write. The example below uses official 2026 federal rates, Indiana's published unemployment figures, and Indiana advisory workers' compensation rates. Plug your own wage and state into the true-cost calculator to change the assumptions.

A worked example: $20 an hour, 40 hours a week, Indiana

Annual wages are $20 × 40 × 52, which is $41,600. There is no overtime in this example because the week stays at 40 hours. Under the federal Fair Labor Standards Act, hours over 40 in a workweek are generally due at one and one-half times the regular rate; the calculator will add that if you enter a longer week.

Employer FICA for 2026 is 6.2% Social Security plus 1.45% Medicare, or 7.65% on wages below the Social Security wage base of $184,500. On $41,600 that is $2,579.20 in Social Security and $603.20 in Medicare, for $3,182.40 total. Those rates are in IRS Publication 15 and IRS Topic 751, and the wage base is confirmed by the Social Security Administration.

Federal unemployment (FUTA) is 6.0% on the first $7,000 of wages, with a common 5.4% credit for paying state unemployment tax on time, leaving a net 0.6%. That is $42 in this example. Employers in a FUTA credit-reduction state can owe more; the IRS updates that list after November 10 of the tax year.

Indiana unemployment (SUTA) applies to the first $9,500 of wages. The Indiana Department of Workforce Development lists 2.50% as a typical new-employer rate, which is also the new-employer rate in the U.S. Department of Labor's January 2026 state UI table. That is $237.50 for this hire. Your assigned rate may differ.

Workers' compensation is an estimate, not a quote

The Indiana Compensation Rating Bureau filing of advisory rates effective January 1, 2026, lists class 5183 (plumbing) at $0.924 per $100 of payroll, with a loss cost of $0.679 and a minimum premium of $451. On $41,600 of wages, $0.924 per $100 equals $384.38, which is below that minimum, so this example uses $451. That figure is an advisory rate, not a binder. Carriers may apply their own loss-cost multipliers, experience modifiers, and credits, and class codes can differ if the work is not standard plumbing. In other states, replace this number with a local quote.

Payroll software and the total

This example includes $660 for payroll software, which is Gusto's publicly listed Simple plan as of November 9, 2026: $49 per month plus $6 per person, annualized for one employee. Paychex does not publish a comparable dollar price on its official plan-comparison page, so we did not invent one. You can edit or remove this line in the calculator.

Add it up: $41,600 wages + $3,182.40 FICA + $42 FUTA + $237.50 SUTA + $451 workers' comp + $660 software = $46,172.90, or about $22.20 per paid hour. That is the employer cost before health insurance, a retirement match, paid time off's effect on productive hours, uniforms, or tools. If you offer benefits, use the optional fields in the calculator so they show up in the total.

Once you are ready to run payroll, compare providers directly. Partner links: Gusto and Paychex.

These numbers are planning estimates, not tax advice and not an insurance quote. Confirm FICA deposits, your SUTA rate, and workers' comp with your accountant, Indiana DWD, and your carrier before you hire.