Employer Payroll Tax Calculator

By Mustafa Bilgic · Last updated 17 August 2026

Employer payroll taxes add a mandatory cost layer on top of every dollar you pay in wages. This calculator estimates your combined FICA, FUTA, and SUTA obligation per employee so you can budget labor costs accurately. Enter a salary and your state unemployment rate below to see the full employer-side tax burden for 2026.

This calculator provides estimates for educational purposes only and is not tax or legal advice. This calculator provides an estimate of employer-side payroll taxes. It is not tax advice — confirm with your CPA or state agency before making decisions. Confirm with your CPA and the relevant agency.

Employer Payroll Tax Calculator

What Employer Payroll Taxes Include

Employer payroll taxes are amounts you owe on top of employee wages, separate from the taxes you withhold from paychecks. The three main components are:

FICA (employer share): You pay 6.2% of wages toward Social Security, up to the annual wage base, plus 1.45% for Medicare on all wages. There is no employer-side cap on Medicare.
FUTA: The federal unemployment tax rate is 6.0% on the first $7,000 of each employee's wages. Most employers receive a 5.4% credit for timely state unemployment payments, reducing the effective rate to 0.6%.
SUTA: State unemployment tax rates and wage bases vary by state and by your claims history. Enter your state's assigned rate and wage base in the calculator.

These are your costs as the employer and do not reduce employee take-home pay. You report and deposit federal payroll taxes using IRS Form 941 (quarterly) and pay FUTA annually or quarterly via Form 940.

How the Calculation Works

The calculator takes each employee's annual gross wages and applies employer-side rates step by step:

Social Security: Multiply wages up to the wage base limit by 6.2%. Wages above the limit are not subject to this tax.
Medicare: Multiply total wages by 1.45%. Unlike Social Security, Medicare has no wage cap for the employer portion.
FUTA: Apply 6.0% to the first $7,000 of wages. With the standard 5.4% credit, the effective cost is $42 per employee per year. If your state is on the DOL's credit-reduction list, enter the reduced credit amount in the tool.
SUTA: Apply your state-assigned rate to wages up to your state's wage base. New employers typically receive a standard rate until they build claims history.

The calculator sums all four components and shows your total employer tax cost alongside the gross salary, giving you the actual per-employee expense before benefits.

FUTA Credits and State Unemployment

FUTA and SUTA interact through a credit system. When you pay your state unemployment tax in full and on time, the IRS grants a 5.4% credit against the 6.0% FUTA rate, dropping it to 0.6%. That means FUTA costs roughly $42 per employee each year for most employers.

However, some states borrow from the federal unemployment fund and fail to repay on time. The Department of Labor publishes a credit-reduction list each November. Employers in those states lose part of the 5.4% credit, increasing their FUTA costs. The list changes annually, so rather than referencing specific states, enter your actual credit-reduction amount directly in the calculator for an accurate result.

Your SUTA rate depends on your state, industry, and experience rating based on claims history. New businesses generally pay a standard new-employer rate, which can be higher or lower depending on the state. Check your state workforce agency notice for your assigned rate and wage base, then enter both in the tool.

Budgeting for Your Total Payroll Tax Bill

As a general guide, employer payroll taxes add roughly 7.65% to 10% or more on top of gross wages, depending on your state unemployment rate and whether employees earn above the Social Security wage base. For budgeting purposes:

FICA alone (6.2% + 1.45%) adds 7.65% to every dollar of wages up to the Social Security limit.
Seasonal businesses or industries with high turnover may face elevated SUTA rates through the experience-rating system.
Payroll taxes are separate from benefits like health insurance, retirement contributions, and workers' compensation. To estimate your true cost of an employee, factor those in as well.

This is an estimate, not tax advice. Deposit schedules, filing deadlines, and state-specific rules affect your actual obligation. Confirm figures with your CPA or state workforce agency before making budgeting decisions. For a broader view of federal payroll rates, see the 2026 payroll tax rates summary.

Frequently Asked Questions

Do I pay the same FICA rate as my employees?

Yes. Employers match the employee share at 6.2% for Social Security and 1.45% for Medicare. The additional 0.9% Medicare tax on wages above $200,000 is only withheld from the employee. You do not pay an employer match on that portion.

What happens if my state is on the credit-reduction list?

Your FUTA credit drops below the standard 5.4%, so your effective FUTA rate increases above 0.6%. The Department of Labor updates the list each year. Enter any credit reduction in the calculator to see your actual cost.

Is FUTA calculated per employee or on total payroll?

FUTA is calculated per employee. The 6.0% rate applies only to the first $7,000 of each individual employee's wages, not on your combined payroll total. With the standard credit, that works out to $42 per employee per year.

How often do I deposit employer payroll taxes?

Federal payroll taxes are deposited monthly or semi-weekly depending on your deposit schedule, reported on IRS Form 941. FUTA is deposited quarterly when the liability exceeds $500 and reported annually on Form 940.