The Hidden Burn Rate: Calculating the True Cost of Campaign Staff
You asked: I have $50,000 budgeted for salaries. That means I can hire 10 people at $5,000 each, right?
The direct answer is no. If you do that, you will bounce checks before Election Day.
In the high-pressure environment of political finance, Treasurers often look at “Gross Pay” as the final number. They see a Field Organizer hired at $4,000 a month and put “$4,000” in the spreadsheet. This is a fatal calculation error.
Every W-2 employee carries a “Labor Burden”—the additional taxes and insurance costs that the campaign (the employer) must pay on top of the salary. In the corporate world, this is standard knowledge. In the scrappy, volunteer-heavy world of campaigns, it is frequently overlooked until the first tax bill arrives and the campaign payroll budget is in the red.
The “Plus 15%” Rule
To protect your “Cash on Hand” (COH) and avoid embarrassing FEC corrections, you need a safe multiplier.
For every dollar you pay in salary, you should budget an additional 12% to 15% for employer taxes and insurance.
If you hire a Campaign Manager for $60,000, the true cost to the campaign is likely closer to $69,000.
The Breakdown: Where Does the Money Go?
Why is the cost so much higher? Here is the math that auditors and the IRS expect you to know.
1. FICA (Social Security & Medicare)
The Cost: 7.65% flat rate.
The Reality: This is non-negotiable. For every $1,000 you pay a staffer, you owe the IRS an extra $76.50 immediately.
2. FUTA (Federal Unemployment Tax)
The Cost: 6.0% on the first $7,000 of wages (often reduced to 0.6% if state taxes are paid on time).
The Reality: While the percentage drops after the wage cap, it hits hard in the first quarter of the year—exactly when many campaigns are cash-poor.
3. SUTA (State Unemployment Tax) – The Wild Card
The Cost: Variable (2.7% to over 10%).
The Reality: This is where campaigns get burned. Because political campaigns are often “new businesses” with no history, states assign them a “New Employer Rate.” This rate is rarely low. In some states, it can be as high as 10% of taxable wages.
4. Workers’ Compensation
The Cost: Varies by “Risk Code.”
The Reality: A Finance Director sitting at a desk is low risk (cheap). A canvasser walking icy sidewalks or driving rural roads is higher risk (expensive). If you fail to carry this policy, you are personally liable for injuries.
The “True Cost” Formula
When presenting the budget to the Candidate or General Consultant, use this formula to justify your numbers:
{Total Cost} = {Gross Salary} + {Gross Salary} {Employer Tax Rate}) + {Fixed Overhead}
Gross Salary:
What you promised the employee.
Employer Tax Rate:
Payroll processing fees, 401k matches (if you’re fancy), and health stipends.
The Cash Flow Trap
Unlike other vendors who might wait 30 days for payment, the IRS and state tax agencies effectively demand payment immediately. Most payroll services impound (withdraw) the taxes at the same time they withdraw the net pay.
If you have $10,000 in the bank and you run a $9,500 payroll, you might overdraft because the tax withdrawal hits simultaneously, pushing the total withdrawal to $11,000.
How AccuPay Protects Your Budget
You are trying to win an election, not get a CPA license.
AccuPay Systems serves as your budget watchdog. Our platform explicitly shows you the “Total Cash Requirement” before you hit submit on payroll. We calculate the FICA, SUTA, and Workers’ Comp down to the penny, so you know exactly how much will leave the campaign account.
Furthermore, we help you manage the volatility of SUTA rates by ensuring your campaign is registered correctly as a new employer, preventing retroactive rate hikes that destroy budgets in October.
Don’t let “hidden” taxes drain your war chest. Budget for the burden.