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Payroll tax calculator

For employers: add the 2026 employer payroll taxes to an employee's wages to see the full cost per year and per pay period.

By the Calcist team · Checked against known answers · Updated October 27, 2026

Data: tax year 2026 · Source: IRS Topic 759, Form 940 (FUTA tax), IRS Topic 751, Social Security and Medicare withholding rates, SSA contribution and benefit base · Last reviewed October 2026

Private: calculated on your device. Nothing you type is sent anywhere.

Estimates for planning, not financial, tax or legal advice. Figures use US rules unless the page says otherwise.

Next: Converting an hourly rate? Use the salary calculator. The employee side is in the FICA tax calculator.

How employer payroll tax is calculated

Employer FICA = 6.2% × min(wages, $184,500) + 1.45% × wages
FUTA = (6.0% − 5.4% credit) × min(wages, $7,000) = 0.6% → at most $42 per employee
State unemployment = your rate × min(wages, state wage base)
Total cost = wages + employer taxes + benefits

Employers match the employee's Social Security and Medicare and pay federal (FUTA) and state (SUTA) unemployment tax on top of wages. They don't match the 0.9% Additional Medicare Tax. Income tax and the employee's FICA are withheld from the employee's pay, so they aren't extra costs.

FUTA: the rate is 6.0% on the first $7,000 of each employee's wages. Paying state unemployment tax on time earns a credit of up to 5.4%, leaving 0.6%. In a credit reduction state, a state that hasn't repaid federal unemployment loans, the credit is cut and FUTA costs more. The Department of Labor usually names each year's credit reduction states in November; the 2026 list wasn't final when this page was reviewed, so check Schedule A of Form 940 and enter any reduction above.

State unemployment: rates and wage bases vary by state and by employer history, so enter the rate and wage base from your state's notice. New employers usually get a set new-employer rate.

Worked example

An employee paid $50,000 a year, every two weeks, in a state charging 2.7% on the first $7,000:

  • Social Security: 6.2% × $50,000 = $3,100. Medicare: 1.45% × $50,000 = $725
  • FUTA: 0.6% × $7,000 = $42. State: 2.7% × $7,000 = $189
  • Total: $54,056 a year, or $2,079.08 per paycheck, 8.1% above wages.

What isn't included

  • Workers' compensation insurance, health insurance, retirement matches and paid leave. Add them as benefits and other costs.
  • Local payroll taxes and state disability or paid family leave programs that some states charge employers.
  • Exemptions: some nonprofits, family employees and government employers don't pay FUTA, and household and farm employers have special rules.

Sources

How we checked this

Before every update, this calculator is run in a real browser with these known answers, and it must match all of them:

  • $50,000 wages, 2.7% SUTA on $7,000: $54,056 a year ✓
  • Same, per two-week paycheck: $2,079.08 ✓
  • $250,000: Social Security capped at $184,500, $265,295 ✓
  • $30,000, 0.3% credit reduction, 3.4% on $9,000: $32,664 ✓
  • $5,000 wages, under every wage base: $5,547.50 ✓

Last checked October 26, 2026. Spotted something wrong? The math is done in your browser with the formula shown on this page, so you can check any result by hand.

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Questions people ask

How much does an employee cost on top of salary?

Federal payroll taxes add 7.65% for FICA plus up to $42 a year for FUTA, and state unemployment tax adds more, usually a few hundred dollars. Benefits, insurance and paid leave typically add much more.

What is the FUTA tax rate for 2026?

6.0% on the first $7,000 of each employee's wages, reduced to 0.6% if you get the full 5.4% credit for paying state unemployment tax. That's $42 per employee per year.

Does the employer pay the 0.9% Additional Medicare Tax?

No. The employer withholds it from the employee's wages over $200,000 but pays no matching share.

What is a FUTA credit reduction state?

A state that borrowed from the federal government to pay unemployment benefits and hasn't repaid it in time. Employers there get a smaller credit, so they pay more FUTA, due with the fourth-quarter deposit.

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