Employer Payroll Tax Calculator (2026)
Employers pay payroll taxes on top of each employee's salary: a matching 6.2% Social Security (up to $184,500 in 2026), 1.45% Medicare, 0.6% FUTA federal unemployment on the first $7,000, plus state unemployment tax. For example, a $60,000 employee costs an employer about $4,632 in federal payroll taxes — roughly 7.7% on top of salary.
How it works
Employer taxes = 6.2% × min(salary, $184,500) + 1.45% × salary + 0.6% × min(salary, $7,000) + SUTA
- Employers match employee FICA dollar for dollar: 6.2% Social Security on wages up to the $184,500 wage base (SSA, 2026) and 1.45% Medicare on all wages. Unlike employees, employers do not pay the extra 0.9% Additional Medicare Tax — that is withheld from the employee only (IRS Pub 15).
- FUTA federal unemployment tax is 6.0% on the first $7,000 of each employee's wages, but employers who pay their state unemployment tax on time receive a 5.4% credit, making the effective rate 0.6% — a maximum of $42 per employee per year. Employers in credit-reduction states pay more.
- State unemployment (SUTA) varies widely: each state sets its own wage base and assigns each employer a rate (new employers typically get a standard new-employer rate). Enter the rate and wage base from your state's annual rate notice for a complete picture.
Worked example
A $60,000 employee in 2026 costs the employer $3,720 in matching Social Security, $870 in matching Medicare, and $42 in FUTA — $4,632 in federal payroll taxes, or about 7.7% on top of salary. With a typical new-employer SUTA rate (say 2.7% on a $9,000 wage base, $243), the total approaches $4,875 before workers' compensation and benefits.
Federal employer payroll taxes by salary (2026)
| Salary | Social Security (6.2%) | Medicare (1.45%) | FUTA | Total federal |
|---|---|---|---|---|
| $40,000 | $2,480 | $580 | $42 | $3,102 (7.75%) |
| $60,000 | $3,720 | $870 | $42 | $4,632 (7.72%) |
| $80,000 | $4,960 | $1,160 | $42 | $6,162 (7.70%) |
| $100,000 | $6,200 | $1,450 | $42 | $7,692 (7.69%) |
The taxes above are only part of the true cost of an employee. Workers' compensation insurance (rates vary by state and job type), state unemployment tax, benefits, and payroll processing all add to it. As a rule of thumb, total employment cost often runs 1.2–1.4× base salary.
See the employee's side of the same paycheck with our state paycheck calculators, check the OASDI wage cap that stops the 6.2% late in the year for high earners, or review 2026 federal tax brackets.
Data & sources
- IRS Publication 15 — Employer's Tax Guide (2026)
- IRS — Federal Unemployment Tax (FUTA) / Topic 759
- SSA — 2026 Social Security wage base
Last updated:
Frequently asked questions
Do employers really pay half of Social Security and Medicare?
Yes. The 7.65% FICA you see withheld from an employee's paycheck is matched dollar for dollar by the employer — 6.2% Social Security up to the $184,500 wage base plus 1.45% Medicare with no cap. A $60,000 employee generates about $4,590 of FICA from each side.
Does the employer pay the extra 0.9% Additional Medicare Tax?
No. The 0.9% Additional Medicare Tax on wages above $200,000 is employee-only. The employer must withhold it from the employee's pay but does not match it.
What is FUTA and why is it usually only $42?
FUTA is the federal unemployment tax: 6.0% on the first $7,000 of each employee's annual wages. Employers who pay their state unemployment tax on time get a 5.4% credit, cutting the effective rate to 0.6% — at most $42 per employee per year, unless the state is in credit reduction.
How do I find my SUTA rate?
Your state unemployment agency mails (or posts) an annual rate notice with your assigned rate and the state's wage base. New employers get a standard new-employer rate, often between about 1% and 4% depending on the state and industry.
Is this the full cost of hiring an employee?
No — payroll taxes are the floor. Workers' compensation insurance, health and retirement benefits, and payroll processing fees add more; a common rule of thumb puts total employment cost at 1.2 to 1.4 times base salary.