Comparison
Does a part-time first employee cost half as much as a full-time one?
Short answer: no, not always. At $20 an hour, a 20-hour week is $20,800 a year in wages and a 40-hour week is $41,600, so wages and employer FICA are half. But net FUTA is $42.00 in both examples once wages pass $7,000, and in states with a modest unemployment wage base the official new-employer SUTA can also be the same at 20 hours and 40 hours. Workers’ comp minimum premiums often behave the same way. Part-time is still cheaper overall; it is just not a clean 50% of the full-time stack.
Key takeaways
- Employer Social Security (6.2%) and Medicare (1.45%) scale with wages (IRS Publication 15). On $20 an hour they are $1,591.20 at 20 hours a week and $3,182.40 at 40 hours.
- Net FUTA is 0.6% on the first $7,000, or $42.00, in both of these $20-an-hour examples, because even a 20-hour year ($20,800) exceeds that base.
- Indiana’s official typical new-employer SUTA is 2.50% on the first $9,500, or $237.50, at both 20 hours and 40 hours, because both schedules exceed $9,500. Nevada’s official 2.95% rate on a $43,700 base does scale in this example: $613.60 at 20 hours and $1,227.20 at 40 hours. Figures come from the DOL January 2026 UI table.
On this page
Compare both schedules Run 20 hours, then change the hours to 40, in the same state.
Open the calculator at 20 hoursThe same $20 wage, two official schedules
| Line at $20 an hour | 20 hours/week (1,040 hours) | 40 hours/week (2,080 hours) |
|---|---|---|
| Wages | $20,800.00 | $41,600.00 |
| Employer Social Security | $1,289.60 | $2,579.20 |
| Employer Medicare | $301.60 | $603.20 |
| Employer FICA | $1,591.20 | $3,182.40 |
| Net FUTA | $42.00 | $42.00 |
| Indiana SUTA (2.50% on first $9,500) | $237.50 | $237.50 |
| Indiana employer payroll taxes | $1,870.70 | $3,461.90 |
| Taxes per paid hour (Indiana example) | $1.80 | $1.66 |
| Nevada SUTA (2.95% on first $43,700) | $613.60 | $1,227.20 |
| Nevada employer payroll taxes | $2,246.80 | $4,451.60 |
The Indiana and Nevada rates and wage bases are official 2026 new-employer figures from the DOL table. Taxes per paid hour in the Indiana example are $1,870.70 ÷ 1,040 = $1.80 and $3,461.90 ÷ 2,080 = $1.66, rounded to the cent. The part-time hire is cheaper in total and more expensive per hour once the wage-base taxes have already been paid.
Insurance and other costs that may not scale
A workers’ comp minimum premium can wipe out some of the savings from cutting hours, as explained on workers’ comp cost for a first employee. Payroll software, posters, and the time it takes to run payroll also tend to be similar for one part-time employee and one full-time employee. Benefits, if you offer them, may have eligibility rules tied to hours; confirm those in the plan documents rather than assuming a 20-hour hire is excluded.
Overtime usually shows up on the full-time side first. A 40-hour schedule has no slack before the FLSA overtime threshold; a 20-hour schedule often does. If the part-time hire regularly spills past 40 hours in a week, you no longer have a part-time cost. See hourly versus salary for how overtime interacts with the pay label, and the state payroll-tax index for your unemployment wage base.
See your state at both hour levels Choose the state, then toggle hours from 20 to 40.
Open the 40-hour calculatorFrequently asked questions
Is a part-time employee half the cost of a full-time employee?
Wages and employer FICA are half if the hours are half and the wage is the same. FUTA and state unemployment tax may not be half, because they apply only up to a wage base. In the official Indiana $20-an-hour example, SUTA is $237.50 at both 20 hours and 40 hours. A workers' comp minimum premium may also fail to scale.
Why is the tax per hour higher on the part-time example?
Once FUTA and, in some states, SUTA have already been paid up to the wage base, those dollars are spread over fewer hours on a part-time schedule. In the official Indiana $20-an-hour example, employer payroll taxes are $1.80 per paid hour at 20 hours and $1.66 at 40 hours.
Should I start a first hire part-time?
Part-time still lowers the total cash you must pay, especially wages and FICA, and it can be a lower-risk way to test the work. Model both schedules, include a workers' comp quote, and be honest about whether the hours will stay under 40.
Figures on this page were checked against the linked official IRS, DOL, USCIS, ACF, and (where used) Indiana ICRB pages in November 2026. Examples are planning estimates, not a tax, legal, or insurance outcome. Confirm with your agencies, accountant, and carrier before you hire or classify a worker.