Employer Payroll Tax Calculator
Updated August 2026 · Free · No sign-up
Calculate the employer side of payroll taxes — the Social Security and Medicare match, FUTA, and state unemployment — to see the real cost that sits on top of every salary you pay.
Quick answer: Employers pay 7.65% FICA match (6.2% Social Security up to the wage base + 1.45% Medicare) + FUTA (effectively 0.6% of the first $7,000) + state unemployment (0.5-6%+ of a state wage base). A $60,000 hire costs roughly $64,900-65,900 before benefits — payroll taxes add 8-10%.
What Employers Pay on Top of Wages
| Tax | Rate | On | Notes |
|---|---|---|---|
| Social Security match | 6.2% | Wages up to the wage base | Mirrors employee side exactly |
| Medicare match | 1.45% | All wages, no cap | No employer share of the 0.9% surtax |
| FUTA (federal unemployment) | 6.0% → 0.6% effective | First $7,000 | 5.4% credit for paying state UI on time; credit-reduction states pay more |
| SUTA (state unemployment) | 0.5-6%+ (experience-rated) | State wage base ($7k-$50k+) | New employers get a standard rate; layoffs raise it |
Together these add roughly 8-10% of payroll for typical wages — before workers' comp, benefits, and admin.
Worked Examples
Example 1 — $60,000 hire, typical state. SS match $3,720 + Medicare $870 + FUTA $42 + SUTA (2.7% × $9,000) $243 = $4,875 employer taxes → true payroll cost $64,875 (8.1% uplift).
Example 2 — high earner. $200,000: SS match caps at the wage base ($10,918) + Medicare $2,900 (uncapped) + FUTA $42 + SUTA $243 = ~$14,103 — 7.1% uplift; the SS cap makes senior salaries proportionally cheaper to tax.
Example 3 — experience rating bites. A firm that ran layoffs sees SUTA jump from 2.7% to 6.5% on a $25,000 base: $1,625/employee/year — a 20-person team pays $32,500/year for its layoff history. Unemployment claims literally price future payroll.
True Cost of a Hire
Loaded cost ≈ salary × 1.25-1.40 once payroll taxes (8-10%), benefits (health, retirement match — 10-20%), and insurance/admin stack up. Budgeting headcount at bare salary is the classic small-business planning error — pair this calculator with the FTE calculator for workforce budgets and the cost of turnover calculator for why keeping the hire matters.
FUTA Mechanics (and the Credit Reduction Trap)
FUTA is nominally 6.0% on the first $7,000, but paying state unemployment on time earns a 5.4% credit → the familiar 0.6% = $42/employee/year. The trap: states that borrowed federal funds for their UI trust and haven't repaid become credit-reduction states — employers there lose 0.3% of credit per year outstanding, quietly raising FUTA. Check the annual IRS credit-reduction list if you employ in historically indebted states. FUTA deposits are quarterly (Form 940 annually) once liability passes $500.
Managing Your SUTA Rate
- Experience rating: your rate follows benefit charges against your account — each layoff's unemployment claims raise future rates for ~3 years. Stable employment is literally a tax strategy.
- Contest invalid claims: respond to every claim notice on time; misconduct terminations and voluntary quits shouldn't charge your account.
- New-employer rates: standard rates (often 2.5-3.5%) apply for the first years until you build experience; some states offer voluntary contributions to buy down a rate — occasionally profitable, do the math annually.
- SUTA dumping is illegal: restructuring entities to shed a bad rate is a federal offense — auditors look for it.
What Employers Do NOT Pay
Employee-side items sometimes miscounted in budgets: federal/state income tax withholding (employee money you remit), the employee 7.65% FICA, and the 0.9% Additional Medicare (employee-only, though you must withhold it above $200k). Conversely, don't forget the non-tax additions: workers' compensation premiums (0.1-10%+ by occupation class), state disability/paid-leave programs (employer-funded in some states), and local payroll taxes in some cities.
Contractor vs Employee: The Tax Gap
The employer 7.65%+ is the headline saving behind contractor classification — and the reason misclassification audits are lucrative for agencies. A worker reclassified from 1099 to W-2 costs back-taxes on both FICA halves plus penalties. Price the honest comparison: contractor rate ÷ 1.3-1.5 ≈ salary equivalent (the worker's side of the same math lives in the hourly to salary calculator); your side adds the taxes this page computes to any W-2 offer. The per-employee tax detail feeds the combined FICA view.
Frequently Asked Questions
What payroll taxes do employers pay?
A 7.65% FICA match (6.2% Social Security to the wage base + 1.45% Medicare uncapped), FUTA (0.6% effective on the first $7,000), and state unemployment at an experience-rated percentage of a state wage base.
How much do employer payroll taxes add to a salary?
Typically 8-10% for ordinary wages — about $4,900 on a $60,000 salary — falling proportionally for salaries above the Social Security cap.
What is FUTA and how much is it?
Federal unemployment tax: 6.0% on the first $7,000 of wages, reduced to 0.6% ($42/employee/year) by the state-UI credit — more in credit-reduction states.
What is SUTA and why does my rate change?
State unemployment insurance, experience-rated: unemployment claims charged to your account raise your rate for future years; clean records lower it toward the state minimum.
Do employers pay the Additional Medicare Tax?
No — the 0.9% above $200,000 is employee-only, though employers must WITHHOLD it once wages with them cross $200k. The employer Medicare match stays 1.45% throughout.
Do employers pay payroll tax on bonuses?
Yes — bonuses, commissions, severance, and PTO payouts are wages for the employer match too (Social Security only up to the wage base).
What is the true cost of a $60,000 employee?
Roughly $64,900 after payroll taxes, and $75,000-84,000 loaded once benefits and insurance are added — the 1.25-1.4× budgeting rule.
Are payroll taxes deductible for the business?
Yes — employer payroll taxes are ordinary deductible business expenses, as are wages themselves.
What happens if payroll taxes are paid late?
Deposit penalties scale 2-15% with lateness, and trust-fund taxes (withheld employee money) carry personal liability for responsible individuals — the one tax debt that pierces the corporate veil.
Do employers pay payroll tax on contractors?
No — 1099 contractors pay their own SECA. Misclassifying employees as contractors to avoid the match triggers back-taxes on both halves plus penalties.
✓ Formula verified • Last updated: August 20, 2026