Employer Payroll Tax Calculator
Employers must match the employee FICA contribution and pay Federal Unemployment Tax (FUTA) on top of wages. For 2026, the employer match is 6.2% for Social Security (on wages up to dollar 184,500) plus 1.45% for Medicare (on all wages with no cap), totaling approximately 7.65% up to the wage base. FUTA is 6% on the first dollar 7,000 of each employee's annual wages, reduced to a net 0.6% for most employers who receive a 5.4% credit for timely payment of state unemployment insurance (SUI/SUTA). The maximum FUTA liability per employee per year is dollar 42 at the net 0.6% rate. This calculator computes employer payroll taxes per employee and for your entire workforce, shows the breakdown between Social Security, Medicare, and FUTA, and calculates your employer overhead percentage. Note: this covers federal employer taxes only. State unemployment insurance rates vary and must be added separately. Sourced from IRS Publication 15 (Circular E) and IRS Topic 759.
For a $60,000-per-year employee, employer federal payroll taxes are approximately $4,590 FICA match ($3,720 SS + $870 Medicare) plus $42 FUTA, for a total federal employer overhead of about $4,632 (7.7% on top of wages).
Per employee
How employer payroll taxes are calculated
Employers in the United States must match the employee FICA contribution and pay FUTA separately. The rates are set by federal law and documented in IRS Publication 15 (Circular E) and IRS Topic 759.
FICA match
employer SS tax = min(annual wages, SS wage base) x 6.2%
employer Medicare tax = annual wages x 1.45%
total employer FICA = employer SS tax + employer Medicare tax
FUTA (Federal Unemployment Tax Act)
FUTA is assessed at 6% on the first $7,000 of each employee's wages. Most employers receive a credit of up to 5.4% for timely payment of state unemployment (SUI/SUTA) contributions, reducing the effective federal rate to 0.6%. The maximum FUTA liability per employee per year at the 0.6% net rate is $42.
FUTA taxable wages = min(annual wages, $7,000)
gross FUTA rate = 6.0%
net FUTA rate = 6.0% - state credit (default 5.4%) = 0.6%
FUTA tax per employee = FUTA taxable wages x net FUTA rate
Total employer cost
total employer taxes = employer FICA + FUTA
employer overhead % = total employer taxes / annual wages x 100
all-employee total = total employer taxes per employee x number of employees
Worked example: $60,000 salary, 1 employee
- Employer SS tax: min($60,000, $184,500) x 6.2% = $60,000 x 6.2% = $3,720.00.
- Employer Medicare: $60,000 x 1.45% = $870.00.
- Total employer FICA: $3,720 + $870 = $4,590.00.
- FUTA taxable wages: min($60,000, $7,000) = $7,000.
- Net FUTA: $7,000 x 0.6% = $42.00.
- Total employer taxes: $4,590 + $42 = $4,632.00.
- Employer overhead: $4,632 / $60,000 = 7.72%.
State unemployment insurance (SUTA/SUI) is not included above and varies by state and experience rating. The total cost of employment also includes workers' compensation insurance, benefits, and other items outside the scope of this federal-tax calculator.
What the $42 FUTA figure leaves out
The number most employers underestimate is not on this page: state unemployment tax (SUTA). Federal unemployment tax is capped at $42 per employee per year once you claim the full 5.4% credit, but a single state's SUTA bill can run into the hundreds or low thousands per worker, because state wage bases are usually far higher than the $7,000 FUTA base and your rate rises with your layoff history, known as your experience rating. Treat the $42 FUTA figure as the smallest unemployment cost you will carry, not the whole of it.
That $42 ceiling also assumes your state is not a credit-reduction state. When a state borrows from the federal unemployment trust fund and does not repay on time, the Department of Labor trims the 5.4% credit, so the net FUTA rate climbs above 0.6% and your per-employee FUTA rises with it. Employers with staff in more than one state must file Schedule A of Form 940 and can face a different net rate in each.
Finally, the overhead percentage is regressive. Social Security stops at the wage base ($184,500 for 2026), so a $60,000 salary carries the full 7.65% FICA load while a $400,000 salary carries far less as a percentage. The base also resets with each employer, so hiring someone who already maxed out Social Security elsewhere does not lower your 6.2% match.
Employer payroll tax: frequently asked questions
What payroll taxes does an employer pay on top of wages?
For each employee, the employer pays: (1) a FICA match of 6.2% Social Security tax on wages up to the annual SS wage base ($184,500 for 2026) plus 1.45% Medicare tax on all wages with no cap; and (2) FUTA of 6% on the first $7,000 of each employee's wages, reduced to a net 0.6% for most employers after the standard 5.4% state unemployment insurance (SUI) credit.
What is the FUTA state credit and when does it not apply?
Employers in states with approved state unemployment programs receive a credit of up to 5.4% against the 6% gross FUTA rate, yielding a net FUTA rate of 0.6% on the first $7,000 of wages. The credit is reduced ("FUTA credit reduction") for employers in states that have borrowed from the federal unemployment trust fund and not repaid within the prescribed period. The DOL publishes the credit reduction list annually.
Does the employer also owe Medicare for high-earning employees?
The employer's Medicare share is a flat 1.45% of all wages with no cap, the same as the employee share. Employees earning over $200,000 ($250,000 married filing jointly) pay an additional 0.9% Additional Medicare Tax on the excess, but this additional 0.9% is the employee's obligation only. The employer does not match the 0.9% surtax.
Is state unemployment tax (SUTA/SUI) included here?
This calculator covers only federal employer taxes (FICA match and FUTA). State unemployment insurance (SUTA or SUI) rates vary by state and by the employer's experience rating, so they are not included. Add your state's SUI rate and wage base to get a complete picture of employer payroll costs.
Official sources
- Employer FICA obligations and rates: IRS Publication 15 (Circular E), Employer's Tax Guide.
- FICA rates summary: IRS Topic 751: Social Security and Medicare Withholding Rates.
- FUTA rules and credit: IRS Topic 759: Form 940 - Employer's Annual Federal Unemployment Tax Return.
- 2026 SS wage base ($184,500): Social Security Administration, Contribution and Benefit Base.
- FUTA credit reduction states (updated annually): DOL, FUTA Credit Reductions.
Reviewed by the CalculatorHub team, edited by James Graham, 12 June 2026. See our methodology. General information, not financial or tax advice.