Did you know that when you hire an employee you will be paying 11.15 cents in taxes for every dollar you pay that employee? That doesn't include worker's compensation (on the job injury insurance) or benefits (medical, dental, vacation, sick leave).

Let's take a closer look at that.

7.65 cents go to Medicare and Social Security. This is the company paid portion. The employee also kicks in 7.65 cents (withheld from their paycheck).

3.50 cents goes to Unemployment taxes. 0.80 cents of that goes to the feds. 2.70 cents goes to the state. The good news is that on the first $7,000 is taxed on the federal level (check with your state to find out the state level). Anything an employee makes over those limits are not taxed for unemployment purposes. The bad news is the $3.50 may increase if your company has several unemployment claims made against it.

Worker's compensation will add to the 11.15 cents spent per dollar. The rate you pay Labor and Industries for worker's comp depends upon your rating and injury record for the state. Constructions firms have some of the highest rates while service companies have the lowest.

Keep this in mind when budgeting and determining what you can afford to pay an employee.