What does an overemployed employee cost?
On a $150,000 salary, one undisclosed second full-time job costs an employer about $120,413 under the default assumptions below. Change any number to match your company.
Cost of one case
$120,413
0.80 times the annual salary
- Paid for work not done
- $52,000
- Recruiting fee for the replacement
- $30,000
- Replacement ramp-up
- $24,375
- Severance
- $11,538
- Manager time
- $2,500
Not included: team morale, rework, customer impact, and any legal, IP or security exposure.
How we calculate this
The estimate adds five costs: pay for work that was not done, the recruiting fee, the replacement's slower first months, severance, and the manager's time. It leaves out the weeks the seat sits empty, because salary stops during them.
Cost = M × (1 − productivity) × (months unnoticed + months on PIP) + fee × salary + ramp months × M × (1 − ramp output) + severance weeks ÷ 52 × salary + manager hours × hourly cost
M is the monthly cost of the seat: salary × (1 + benefits and taxes) ÷ 12.
| Input | Default | Where it comes from |
|---|---|---|
| Months before anyone acts | 6 | Washington State Auditor, December 2024: average overlap across 93 cases |
| Benefits and taxes | 30% | U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation, June 2026: benefits are 30% of total compensation in private industry |
| Recruiting fee | 20% | Underdog.io, July 2026: agencies charge 15% to 25% of first-year salary |
| Severance | 4 weeks | Challenger, Gray & Christmas, December 2025: under 10 weeks for individual contributors |
| PIP, ramp-up, manager time | 2 months, 3 months at 50%, 25 hours | Our assumptions. No reliable public benchmark exists, so change them to match your experience. |
Gallup puts the cost of replacing an employee at one-half to two times annual salary. This is an estimate using public benchmarks and your inputs. It is not legal, HR or financial advice.
Keep this number at zero.
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