Employer Burden Explained: What a $20-an-Hour Caregiver Really Costs

When you hire a caregiver at $20 an hour under California's Self-Determination Program (SDP), your budget does not pay $20 an hour. It pays $20 plus the taxes, insurance and sick leave that come with being an employer. That extra is called employer burden, and it is the most common thing new families leave out of a spending plan.

What counts as employer burden?

Employer burden is every cost an employer pays because of a wage, on top of the wage itself. The caregiver never sees these amounts on a pay stub. They are separate from the income tax, Social Security and Medicare withheld from the caregiver's own pay.

Sentinel Four publishes the breakdown we use. As of 2026 it has seven components:

• Social Security (employer share): 6.20%
• Medicare (employer share): 1.45%
• Federal unemployment insurance (FUTA): 1.80%
• California state unemployment insurance (SUTA): 3.40%
• California Employment Training Tax (ETT): 0.10%
• Workers' compensation insurance: 6.05%
• Paid sick leave: 1.92%

Each is a percentage of gross wages. Together, burden typically adds 19% to 25% on top of wages, depending on the model and the year. The rates change; the unemployment and workers' compensation lines in particular are set outside our control.

The arithmetic, once

Take a caregiver at $20.00 an hour under the Co-Employer model. Harbor Regional Center's published employer-burden table lists Sentinel Four at about 21% for Co-Employer, so:

• Wage: $20.00
• Burden at about 21%: about $4.20
• All-in cost: about $24.20 an hour

At 25 hours a week that is about $605 a week from the budget, not $500. Over 52 weeks the burden alone is roughly $5,460 on that one position.

That is why we tell families a $20-an-hour caregiver costs about $23 to $25 an hour all-in.

Do the arithmetic yourself before you commit to a wage. Wage times 1.21 (Co-Employer) or wage times 1.15 (Sole Employer), then times the hours in the plan, then times the weeks in the year. That is the number that has to fit inside the line item.

Why the Sole Employer rate is lower

Harbor's table lists two rates for Sentinel Four: about 21% under Co-Employer (service code 316) and about 15% under Sole Employer (service code 317).

The difference is largely workers' compensation. In the Co-Employer model, Sentinel Four carries the workers' compensation coverage for the caregiver, and that cost is inside the 21%. In the Sole Employer model the participant or representative is the legal employer of record. The family may secure its own workers' compensation policy, or use ours. When the family carries its own policy, that cost sits outside the FMS burden rate, so the published rate is lower. The insurance still has to exist and be paid for, from a different place. Workers' compensation for SDP caregivers explains what the coverage does and who carries it.

A lower rate is not automatically a better deal. Sole Employer means the family holds the legal employer obligations, and workers' compensation is the one that is expensive to get wrong. Talk to your case manager before choosing a model on the rate alone. Understanding the Co-Employer model covers the tradeoff.

Why it belongs in the spending plan

The spending plan lists each service, how often it happens and what it costs, in uniform budget categories, and the total cannot exceed the individual budget. The regional center reviews it. If the plan carries a caregiver at $20 an hour and burden is not included, that line is under-funded by about a fifth before the first shift is worked.

Employer burden is a real cost of the service. Put the all-in rate in the plan, or list burden as its own line, whichever your regional center prefers. Either way, the money has to be inside the budget. Individual budget vs spending plan explains where each number lives.

What happens when families forget it

The failure is slow and then sudden. Payroll runs every week, and each week the line item drops by wage plus burden instead of wage alone. Months later the case manager calls: the caregiver line will run out before the plan year ends.

The choices at that point are all bad. Cut the caregiver's hours. Move money from another category, if the plan allows it and the regional center agrees. Ask for a budget adjustment, which takes time and is not guaranteed. Or let the caregiver go early. We see this often enough that it has its own entry in Common mistakes new SDP families make.

The prevention is one multiplication at planning time.

How Sentinel Four handles this

We publish our burden breakdown, and Harbor Regional Center lists our rates by model, so a family can do the math before signing anything. During onboarding your dedicated case manager maps the spending plan to service codes and checks that each staff line covers wage plus burden for the year, and flags the gap if it does not.

Once the caregiver starts, the portal shows the budget and the remaining balance in each category, updated as payroll and invoices post. In the Co-Employer model we carry workers' compensation, file the employer taxes and pay the employer-side costs from the budget. In the Sole Employer model we do the same as your payroll agent, with workers' compensation arranged either through us or through your own policy. The payroll service page and the workers' compensation page have the details.