What payroll taxes does an employer pay on top of salary?

For 2026, employers pay: (1) Social Security match — 6.2% of wages up to $176,100 per employee (max $10,918.20 per employee). (2) Medicare match — 1.45% of all wages, no wage cap. (3) FUTA — 0.6% net federal unemployment tax on first $7,000 of wages per employee (max $42). (4) SUTA — state unemployment tax, typically 2.7% for new employers on the first $7,000–$12,000+ of wages depending on state. These taxes add roughly 7–12% above base salary for most employees.

What is FUTA and how much does it cost per employee?

FUTA (Federal Unemployment Tax Act) funds the federal unemployment insurance program. The gross FUTA rate is 6.0%, but employers in states that pay their SUTA (state unemployment) in full receive a 5.4% credit, making the net FUTA rate 0.6%. It applies only to the first $7,000 of each employee's annual wages, making the maximum FUTA cost $42 per employee per year. FUTA is paid entirely by the employer — it is never deducted from employee paychecks.

How much does workers compensation insurance cost?

Workers compensation premium is calculated as: (annual payroll ÷ 100) × rate per $100 payroll. Rates vary dramatically by job class and state. Low-risk office/clerical workers cost around $0.18–$0.35 per $100 payroll, while high-risk construction or roofing workers can cost $8–$25+ per $100 payroll. Use our dedicated Workers Comp Calculator for an estimate based on specific job classification and state.

Do employers pay Medicare on all wages with no cap?

Yes. Unlike Social Security, there is no wage base cap on Medicare. Employers pay 1.45% Medicare match on every dollar of employee wages, regardless of amount. For high-earning employees, the employer owes Medicare match on all wages — for a $300,000 salary, the employer pays $4,350 in Medicare match alone. Note: the Additional Medicare Tax (0.9% surcharge) only applies to the employee side — employers do not pay the additional 0.9%.

Employer Payroll Tax Calculator 2026

See the true cost of each employee — salary plus employer FICA, FUTA, SUTA, and workers comp estimate.
Based on 2026 IRS rates. All 50 states.

Last updated: September 2026 — rates sourced from IRS, SSA & state revenue departments

Employee Cost Details 2026 Rates

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What employers actually pay in payroll taxes in 2026

A $60,000 salary does not cost an employer $60,000 per year. Mandatory employer-side payroll taxes add 7–12% on top of wages — meaning the true all-in cost is typically $64,000–$68,000+ for a $60,000 employee before health benefits, retirement matching, or other perks.

Employer FICA is a dollar-for-dollar match of the employee's Social Security (6.2% up to the $176,100 wage base) and Medicare (1.45% on all wages). Combined, the employer FICA obligation is 7.65% of wages up to the SS wage base, then 1.45% on wages above it.

FUTA and SUTA fund unemployment insurance. Net FUTA is a flat $42 maximum per employee per year (0.6% on first $7,000). SUTA varies by state and employer experience rating; new employers typically pay 2.7% on the first $7,000–$12,000 of wages.

For an accurate workers comp estimate by job class, see the Workers Comp Calculator. For the employee's take-home pay, see the Payroll Tax Calculator.

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Disclaimer: Employer cost estimates are based on 2026 IRS rates, SSA wage base, and average new-employer SUTA rates. Workers comp is estimated at 1.5% — actual rates vary by state and job class. Not tax or legal advice.

FAQ

Employer payroll tax questions

What is the employer FICA rate for 2026?

Employers pay a 7.65% FICA tax match on wages up to the Social Security wage base ($176,100 for 2025; 2026 base TBA): 6.2% Social Security plus 1.45% Medicare. On wages above the SS wage base, only the 1.45% Medicare portion applies. There is no employer obligation for the Additional 0.9% Medicare Tax — that applies only to the employee side.

What is SUTA and how is it calculated?

SUTA (State Unemployment Tax Act) funds state unemployment insurance programs. Each state sets its own rate and taxable wage base. New employers typically pay the "new employer rate" — averaging around 2.7% nationally — on the first portion of each employee's wages. As your business matures, your rate changes based on your unemployment claims "experience rating." States with higher SUTA wage bases (like Washington at $68,500) can mean far higher actual SUTA costs than the federal FUTA floor.

When do employers deposit payroll taxes?

The IRS assigns employers a monthly or semi-weekly deposit schedule based on tax liability in the lookback period. New employers deposit monthly. If accumulated tax liability exceeds $100,000 in a single day, a next-day deposit is required. FUTA is deposited quarterly (by the last day of the month after each quarter) if the accumulated FUTA liability exceeds $500. State payroll tax deposit schedules vary by state.

Employer Payroll Tax Calculator 2026

What employers actually pay in payroll taxes in 2026

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