The Effect Of Cost Per Hour Rate Between State Of Illinois, Usa And Ontario, Canada

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INTRODUCTION: In this report we are analyzing and comparing cost per hour rate between the State of Illinois, USA and Ontario, Canada. Where we have to find the cost or a number, to determine what market is better to open a new factory in either Illinois or Ontario.
BACKGROUND: Illinois is one of the nation 's manufacturing leaders, boasting annual value added productivity by manufacturing of over $107 billion in 2006. As of 2011, Illinois is ranked as the 4th most productive manufacturing state in the country, behind California, Texas, and Ohio. About three-quarters of the state 's manufacturers are located in the Northeastern Opportunity Return Region, with 38 percent of Illinois ' approximately 18,900 manufacturing plants located in …show more content…

The dollar conversion rate of 1 US dollar to 1 Canadian dollar is $1.25 on March 5, 2015. The quantitative analysis for Illinois and Ontario is here under: ILLINOIS, USA ONTARIO, CANADA
Conversion Rate US-CA $ 1.00 $ 1.25
Minimum Wage $ 8.25 $ 11.00
Average hours per week 40 Hours 40 Hours
Average working weeks in a year 52 52
Yearly gross wage (per hours x 40 x 52) US$17,160 CAN$22,880
Yearly gross wage of Illinois State into Canadian dollars is (17,160 x 1.25) CAN$21,450 ---
In USA, according to the U.S. Social Security Administration, An employer is required to contribute an amount equal to 6.2 percent of employee wages for Social Security and 1.45 percent for Medicare ( Employer’s contribution in taxes in the State of Illinois, USA is: Employer’s contribution of Social Security tax 6.2% 17160 $1063.92
Employer’s contribution of Medicare tax 1.45%x 17160 $248.82
State unemployment tax (New employer’s use 3.95% for 2014 and 3.75% for 2015) 3.75% x 12,960 (base) $486.00 Federal unemployment taxes (6%-5.4%) 0.6% x $7,000 (base) $42.00
Total contribution of an employer in the State of Illinois is $ 1,840.74. When we add the gross wage and taxes for the year

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