Your total employer cost: the benefits load you now pay yourself

What your employer was paying beside your salary

Five lines, and you can look up national numbers for only two of them. The payroll tax match and the health premium have published figures. The retirement match, the group disability and life policies, and the paid time off you accrued are priced by your own plan documents and nobody else's. Add the lines up. Multiplying your salary by a rule of thumb somebody quoted you produces a number with no source.

Both of the published lines come from primary documents you can read yourself. The IRS states what an employer owes on wages in its own guide for employers, and KFF's annual employer health benefits survey states what employer-sponsored coverage costs and who pays which share of it. The other three lines were written by one employer for one employee, and the only copy describing yours sits in your own file.

But a national average describes other employers, and you are trying to price one.

What comes out of the exercise is a single figure: the revenue your practice has to clear, ahead of your own draw, to leave you level with the job you left. That figure belongs at the top of the startup budget, above the rent and the software, because it is the one line that stayed invisible the whole time you were employed.

The payroll tax match you now pay on both sides

Your employer paid an amount equal to what came out of your paycheck for Social Security and Medicare. The IRS says so in the guide it writes for employers: the rate of Social Security tax on taxable wages is 6.2 percent each for the employer and the employee, and Medicare is 1.45 percent each 1Ref 1Internal Revenue Service (2026).Publication 15 (2026), (Circular E), Employer's Tax Guide.The employer's matching Social Security rate of 6.2% and Medicare rate of 1.45% on taxable wages, and the 2026 Social Security wage base of $184,500 with the Medicare rate unchanged from 2025.. Leaving the payroll does not remove that money from the arithmetic. It moves both halves onto you as self-employment tax.

The self-employment tax rate is 15.3 percent, made up of 12.4 percent for Social Security and 2.9 percent for Medicare 2Ref 2Internal Revenue Service (2024).Self-employment tax (Social Security and Medicare taxes).The 15.3% self-employment tax rate split into 12.4% Social Security and 2.9% Medicare, and the deduction of the employer-equivalent portion of that tax in figuring adjusted gross income.. That is the same combined rate the two sides of a W-2 were splitting between them. The code acknowledges the split rather than pretending it away: a self-employed person deducts the employer-equivalent portion of self-employment tax in figuring adjusted gross income 2Ref 2Internal Revenue Service (2024).Self-employment tax (Social Security and Medicare taxes).The 15.3% self-employment tax rate split into 12.4% Social Security and 2.9% Medicare, and the deduction of the employer-equivalent portion of that tax in figuring adjusted gross income.. What that deduction is worth turns on your bracket, which is arithmetic to run with your CPA.

Only the Social Security portion has a ceiling. For 2026 the wage base is $184,500, and the employer-side Medicare rate stays at 1.45 percent, unchanged from 2025 1Ref 1Internal Revenue Service (2026).Publication 15 (2026), (Circular E), Employer's Tax Guide.The employer's matching Social Security rate of 6.2% and Medicare rate of 1.45% on taxable wages, and the 2026 Social Security wage base of $184,500 with the Medicare rate unchanged from 2025.. For the 2025 tax year the base was $176,100 3Ref 3Internal Revenue Service (2025).Instructions for Schedule SE (Form 1040) (2025).The 2025 Social Security wage base of $176,100 and the $400 net-earnings-from-self-employment floor that triggers the Schedule SE filing obligation.. The IRS resets that figure every year, so read the current instructions instead of last year's spreadsheet.

Schedule SE (Form 1040) is where the number gets computed, and its Part I separates a Social Security calculation capped at the wage base from a Medicare calculation with no cap 4Ref 4Internal Revenue Service (2025).Schedule SE (Form 1040): Self-Employment Tax.Naming the current filing form and its Part I structure, which separates a Social Security calculation capped at the wage base from an uncapped Medicare calculation, and the adjustment the form applies to net earnings before the rates.. The form also applies its own adjustment to net earnings before either rate lands, so multiplying profit by 15.3 percent overstates the bill. The filing floor is $400 of net earnings from self-employment 3Ref 3Internal Revenue Service (2025).Instructions for Schedule SE (Form 1040) (2025).The 2025 Social Security wage base of $176,100 and the $400 net-earnings-from-self-employment floor that triggers the Schedule SE filing obligation., low enough that it settles only whether the form is required at all.

How much of the health premium your employer was carrying

Most of it, on the national average. Employer-sponsored coverage averaged $9,325 a year for single coverage and $26,993 for family coverage in 2025, and covered workers paid 16 percent of the single premium and 26 percent of the family premium, or $1,440 and $6,850 5Ref 5KFF (Kaiser Family Foundation) (2025).2025 Employer Health Benefits Survey.National 2025 benchmark only: average total annual premiums of $9,325 single and $26,993 family, and average worker contributions of 16% ($1,440) and 26% ($6,850), from which the employer-side share is derived.. Subtract one from the other and the employer side runs roughly $7,885 and $20,143 a year.

But those are survey averages across every covered worker in the country, and they make a poor input to your own model. What an individual-market plan costs you depends on your age, the state you live in and the plan you choose, and none of the three resembles a national mean. Treat the employer-side figure as a floor for sanity-checking a quote, then go and get the quote.

The common bridge while you shop is continuation coverage from the plan you are leaving, and the feature worth knowing in advance is that its price is generally the full group premium plus an administrative charge, not the payroll deduction you were used to seeing. Ask your benefits administrator for the exact monthly figure in writing before you give notice. That number sets your first months on your own.

Retirement, disability and life: what stops and what replaces it

The employer match stops on your last payroll, and the group disability and life policies many employers carry alongside it generally end with employment too. What replaces the retirement piece is a plan you fund from both sides yourself. For 2026 the elective deferral limit is $24,500, and the total that can go into a defined-contribution account, once an employer-side contribution is stacked on top, is $72,000 6Ref 6Internal Revenue Service (2026).Retirement Topics — COLA Increases for Dollar Limitations on Benefits and Contributions.The 2026 elective-deferral limit of $24,500 and the $72,000 overall defined-contribution addition limit, used as the ceiling on a solo plan funded from both the employee and employer side..

What the match itself was worth is a question only your own plan statement answers. Find the employer contribution line on the most recent statement and annualize it. No national figure is worth substituting there, and the ones that circulate describe employers you never worked for.

Disability cover carries a wrinkle that changes the replacement math. Under the general federal rule, benefits from a policy whose premiums you paid yourself are not taxable, while pay you received from an employer while sick or injured was ordinary taxable wages 7Ref 7Internal Revenue Service (2025).Publication 525 (2025), Taxable and Nontaxable Income.The general federal rule that disability benefits under a policy the taxpayer personally paid for are not taxable, while pay received from an employer while sick or injured is ordinary taxable wages.. A benefit you owe no tax on does more work per dollar than one you do, so a private policy may not have to match the group face value to leave you where you were. Where that lands for your situation is a calculation for your CPA, and it turns on who pays the premiums.

Where your own numbers live

In four documents you can gather in an afternoon, all of them things you still have access to while you are employed. The national averages set the shape of the estimate. Your final W-2, your benefits administrator, your retirement plan statement and your certificates of coverage set the amounts. Pull them before you give notice, because access to some of them narrows the day employment ends.

But one line has no document behind it.

Paid time off is worth what those hours would have billed, and once you are the practice, a week away is a week with no revenue and the same rent. Price it against your own billing rate. Your old salary divided into hours describes a job you no longer hold. Request every rate sheet and plan statement while you are still on the payroll.

What to do with the total

Treat it as a revenue floor and nothing more. Adding the lines gives you the amount your practice has to clear, ahead of your own draw, to leave you level with where you were. That is a target for the model. It says nothing about whether the trade is worth making, because the reasons people leave salaried work appear nowhere on a benefits statement.

The floor also arrives before the revenue does.

Payer enrollment and credentialing run on their own clocks, and the months between opening the door and the first paid claim are months when every line above is already yours. Planning for that gap is what the 12-month runway is for, and the benefits figure is the number that fills its early months.

Run the arithmetic with your CPA before you set a fee schedule. The deduction for the employer-equivalent half of self-employment tax and the tax treatment of a policy you pay for yourself both move the answer, and both turn on facts about you that this page does not have. Bring the four documents and the current year's Schedule SE instructions to that meeting.