Cannabis Businesses: How to Calculate Your Payroll Costs (2026)

Managed payroll by headcount for a cannabis business

10 employees: $450 a month, $5,400 a year; 25 employees: $1,125 a month, $13,500 a year; 50 employees: $2,250 a month, $27,000 a year; 100 employees: $4,500 a month, $54,000 a year. Every row is $45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum, so the per-employee cost is the same at 10 as at 100. Nothing in the cannabis business setup, 280E tax code payroll deductions, cash payroll documentation, state cannabis board reporting and banking restrictions, is billed as an add-on.

The employer-side tax that rides on every cannabis business wage

At the May 2025 national median for retail salespersons, $35,410 a year or about $17 an hour, the employer share of Social Security and Medicare is $2,709 per employee per year and FUTA is $42 after the state credit, before state unemployment at the assigned rate. Those costs are the same whoever runs payroll; the calculator question is only who does the work and who carries the error.

IRC section 280E disallows all deductions or credits for a business that traffics in marijuana, even where the sales are legal under state law, but the business may still reduce gross receipts by cost of goods sold calculated under section 471. A dispensary may not deduct advertising or selling expenses.

The in-house line in the calculation

BLS OEWS May 2025: payroll and timekeeping clerks, national median $58,260, mean $59,630. Add roughly 30 percent for benefits and employer taxes, about $75,738, before the software that person runs, and set it against the headcount rows above. Managed payroll stays under that loaded figure until about 140 employees.