What Does It Actually Cost to Open a Business in Wisconsin?
As election season heats up in Wisconsin, certain candidates are making campaign promises that would raise taxes on successful business owners, increase the minimum wage, create new employer mandates, and shift more costs onto businesses.
Those costs would come on top of what it already takes to open and operate a business.
Before Wisconsin entrepreneurs can open shop and earn their first dollar, there are registrations to file, permits to obtain, taxes to register for, zoning rules to check, insurance policies to purchase, inspections to pass and agencies to navigate. Once the doors open, taxes, licensing, payroll and other recurring costs follow.
What does that actually add up to? Let’s start with a hypothetical 5,000-square-foot auto body shop in Green Bay with five employees.
Before the Doors Open
Our shop performs collision repair, vehicle refinishing and painting in an existing commercial building that requires electrical, plumbing and HVAC renovations to comply with regulations for use as an auto body shop. That brings the ordinary requirements of a brick-and-mortar business, plus some industry-specific rules.
Also required: 10+ permits, registrations, plans and approvals
Not included: Rent, renovations, tools, equipment, inventory, insurance or payroll
Revenue earned: $0
The state charges $130 to organize a Wisconsin LLC online and $20 for initial business tax registration. Green Bay's permitting process can include site and building-plan review, trade permits, inspections and a certificate of occupancy, depending on the work being performed.[1]
By opening day, we've identified about $1,705 in government fees, before the cost of equipping, insuring or staffing the business.
Environmental Rules Add Another Layer
For an auto body shop, opening also means navigating environmental rules involving air emissions, hazardous waste, used oil and wastewater. Wisconsin DNR even includes auto body repair as a specific industry in its Environmental Responsibility Navigator.
A business generating more than 220 pounds of non-acute hazardous waste in a month falls into Wisconsin's Small Quantity Generator category. DNR specifically directs auto body shops to evaluate whether they cross the 220-pound threshold.
For our shop, we're assuming that threshold is met. That means waste-management and reporting requirements, a $350 annual base fee and $20 per ton of applicable hazardous waste under Wisconsin DNR's hazardous-waste fee schedule.
For our shop: $350+ annually, plus hazardous-waste reporting and compliance requirements.
The Annual Bill
Now assume our five-person shop has $300,000 in annual payroll.
Employers pay 6.2% of covered wages for Social Security and 1.45% for Medicare under the IRS Employer's Tax Guide. Wisconsin and federal unemployment taxes add another expense.
Wisconsin's 2026 initial unemployment-tax rate for a new non-construction employer is 3.05% on the first $14,000 paid to each employee. Federal unemployment tax can effectively be 0.6% on the first $7,000 per employee when the employer qualifies for the full state credit.[2]
And $25,670 isn't the shop's total burden. It doesn't include income or property taxes, workers' compensation, hazardous-waste tonnage fees or the time and professional help compliance can require.
Now Add a $15 Minimum Wage
Gubernatorial nominee David Crowley is campaigning on immediately raising Wisconsin’s minimum wage to at least $15 an hour, with a path to $20 by 2030. A $15 statewide minimum wage was also proposed in Assembly Bill 1169 during the 2025–26 legislative session.
Suppose two of our five employees currently earn $12 an hour and work full time.
THE ADDED COST
Current combined wages: $49,920
Wages at $15/hour: $62,400
Additional wages: +$12,480
Additional employer payroll taxes: +$955
TOTAL ADDITIONAL DIRECT COST: $13,435/YEAR
Because payroll taxes are calculated from wages, the higher wages also increase the shop's payroll-tax bill.
Suppose the shop has $1 million in annual sales and earns a 7.9% net profit margin, an industry estimate that falls within the 6% to 10% range reported by the 2024 FenderBender Industry Survey.[3]
WHAT $13,435 MEANS
Annual sales: $1,000,000
Illustrative profit: $79,000
Added wage + payroll-tax cost: -$13,435
Profit after added cost: $65,565
Cost as share of sales: 1.3%
COST AS SHARE OF PROFIT: 17%
Against $1 million in sales, $13,435 can sound relatively small. But sales aren't profit. After employees, suppliers, rent, insurance, taxes and operating expenses are paid, our example leaves $79,000.
The additional $13,435 consumes about 17% of it.
The shop remains profitable, but the owner has to make up the difference somewhere: higher prices, lower expenses, different staffing decisions, delayed expansion or a smaller return.
Add Another Payroll Mandate
Paid family and medical leave has also been part of the 2026 campaign conversation. David Crowley has said Wisconsin “absolutely” needs a statewide paid family and medical leave program, although he has not publicly specified an employer contribution rate.
Assembly Bill 1012, proposed during the 2025–26 Legislature, shows how such a program would affect employers.
For employers with more than 50 workers, the employer would contribute one-half of the employee-required contribution. For businesses with 50 or fewer employees, the Department of Workforce Development would establish tiered employer contribution rates. The bill doesn't specify those rates, so we can't honestly assign our five-person shop an exact dollar cost.
But we can see what different hypothetical employer-side rates would mean on $300,000 in payroll:
AB 1012 provides tiered rates for small employers, and we don't know what our shop's rate would ultimately be. Whatever rate DWD established, however, would be another mandatory expense calculated from payroll already subject to Social Security, Medicare, unemployment taxes, workers' compensation and other employment costs.
It wouldn't replace any of those costs. It would be added to them.
Before Wisconsin Asks Businesses to Pay More
None of these costs alone necessarily closes our hypothetical shop. But the existing burden is already substantial, and every additional tax or new government mandate adds another expense that cuts into already-thin margins and makes it harder for the business to remain profitable, hire and grow.
Our entrepreneur pays about $1,705 before opening, then at least $25,670 in identifiable annual taxes and government fees under our assumptions.
The minimum-wage example adds $13,435 per year, consuming about 17% of the shop's illustrative profit. A new payroll mandate to provide guaranteed family and medical leave would add another expense on top of that.
Here lies the problem with treating successful businesses as an endless source of funding for new political promises. Revenue isn't profit, and a successful business isn't a bottomless bank account.
When government adds another cost, independent businesses on Main Street are forced to absorb it. The owner earns less, customers pay more, hiring changes or an expansion gets delayed.
Wisconsin entrepreneurs already take the risk of putting their money and time behind an idea. When they succeed, they create jobs, serve customers and generate the economic activity government depends on too.
Before Wisconsin asks businesses to pay more, policymakers should understand the costs of what they're already extracting from business to open, operate and employ people.
Footnotes
[1] Opening-cost assumptions. The $1,705 figure is an illustrative estimate for the hypothetical Green Bay project, not a universal fee for opening an auto body shop. Which permits and reviews apply depends on the building and work performed. See Green Bay's permit guides, forms and fees and commercial permitting information.
[2] Annual-tax assumptions. The $22,950 FICA calculation assumes the full $300,000 payroll is subject to the applicable employer Social Security and Medicare taxes. The $2,135 Wisconsin unemployment figure assumes five employees each earn at least Wisconsin's $14,000 taxable wage base and the shop qualifies for the 3.05% new non-construction employer rate. The $210 FUTA figure assumes five employees each reach the $7,000 federal wage base and the employer receives the maximum state unemployment credit. See the IRS Employer's Tax Guide.
[3] Profit-margin assumption. The 7.9% figure is an industry estimate, not a prediction of this hypothetical shop's actual profitability. A BBB automotive-repair industry report estimates the average body shop at a 7.9% profit margin. Separately, the 2024 FenderBender Industry Survey reports 6% to 10% overall net profit among its collision-repair respondents.