This FUTA and SUTA employer payroll tax calculator estimates the true cost to employ a worker in 2026 — not just the wage, but every mandatory employer payroll tax stacked on top. It computes FUTA (the federal unemployment tax, effectively 0.6% on the first $7,000), your state SUTA (state unemployment), and the employer's 7.65% share of FICA (Social Security and Medicare). Enter an employee's annual wage and your SUTA rate and wage base to see your full per-employee payroll burden.
When you hire someone, the gross wage is only the start. Three mandatory federal-and-state payroll taxes land on the employer, separate from anything withheld from the employee's paycheck:
Together these add roughly 8–12% on top of every wage dollar before you spend a cent on benefits, workers' comp, or overhead. This calculator isolates exactly that mandatory payroll-tax layer.
FUTA — the Federal Unemployment Tax Act — funds the federal share of state unemployment systems. The headline rate is 6.0%, but it applies only to the first $7,000 of each employee's annual wages. Crucially, employers who pay their state unemployment tax on time earn a 5.4% credit, dropping the effective FUTA rate to 0.6% — a maximum of just $42 per employee per year. FUTA is paid entirely by the employer and is never withheld from employees.
SUTA is where employer unemployment cost really lives. Each state sets its own taxable wage base — from $7,000 in some states to well over $60,000 in others — and its own rate schedule. New employers receive an assigned starting rate (often around 2.5%–3.5%). Established employers get an experience rating: lay off few workers and your rate falls; have many former employees draw benefits and it climbs. Because both the base and the rate differ by state, identical wages can produce very different SUTA bills. Enter your specific rate and base from your state agency notice for an accurate figure.
If a state borrows from the federal government to pay unemployment benefits and fails to repay on schedule, the IRS reduces that state's 5.4% FUTA credit. Employers in a credit-reduction state therefore pay a higher effective FUTA rate — commonly 0.9% in the first year of reduction and rising 0.3% annually until the loan is repaid. Check the box in the calculator to model a 0.9% effective rate. The IRS publishes the current credit-reduction state list each November.
| Employer tax | Basis | Cost |
|---|---|---|
| FICA (Social Security 6.2%) | $55,000 | $3,410.00 |
| FICA (Medicare 1.45%) | $55,000 | $797.50 |
| FUTA (0.6%) | first $7,000 | $42.00 |
| SUTA (2.7% on $14,000 base) | first $14,000 | $378.00 |
| Total employer payroll tax | — | $4,627.50 |
| True cost to employ | wage + tax | $59,627.50 |
That is about 8.4% above the wage from mandatory payroll taxes alone. Add health insurance, retirement match, paid leave, and workers' compensation, and the loaded cost of an employee commonly runs 1.25–1.4× the base salary.
Because SUTA is experience-rated, the most powerful lever is managing turnover and unemployment claims. Contesting improper claims, documenting voluntary quits and for-cause terminations, and offering work to laid-off staff before benefits run all help keep your experience rating — and your rate — low. Some states also allow a voluntary contribution: paying a small extra amount before the rate-setting deadline to buy down into a lower rate tier, which can pay for itself many times over for larger payrolls.
The tool applies the 2026 employer FICA match (6.2% Social Security up to $184,500 plus 1.45% Medicare uncapped), FUTA at 0.6% (or 0.9% if you flag a credit-reduction state) on the first $7,000, and your entered SUTA rate on your entered state wage base. It sums these into a total employer payroll tax, expresses it as a percentage of the wage, and adds it to the wage to show the true cost to employ that worker. Use it per employee, since FUTA and SUTA both cap at a wage-base ceiling.
The single biggest driver of how much SUTA you pay isn't always the rate — it's the taxable wage base, and states are all over the map. Several states still mirror the federal $7,000 FUTA base, which keeps SUTA tiny per employee. Others set far higher bases: some exceed $50,000 or $60,000, and a couple index their base to average wages so it climbs every year. A 2.7% rate on a $7,000 base is just $189 per employee, but that same 2.7% on a $62,500 base is $1,687 — nearly nine times more for an identical worker. This is why you cannot estimate employer payroll cost from the rate alone; you must plug in your state's actual base. The calculator above takes both as inputs precisely because the base swings the result so dramatically. When you hire across multiple states, expect your per-employee unemployment cost to differ widely even for the same salary.
When you register for a state unemployment account, you don't get a custom rate immediately — you're assigned a new-employer rate, often a flat figure in the 2.5%–3.5% range (varying by state and sometimes by industry, with construction frequently higher). You keep that introductory rate for a couple of years until the state has enough history to compute your experience rating. From then on, your rate reflects the benefits former employees have drawn against your account versus the taxes you've paid in. Lay off few workers and your rate drifts down toward the state minimum; have many claims and it climbs toward the maximum. Because that rating follows your business, controlling turnover early pays dividends for years. A merger or acquisition can transfer an experience rating, so review the acquired entity's history before you take on its payroll.
This calculator isolates the three mandatory tax layers, but they're only part of an employee's true loaded cost. Workers' compensation insurance is legally required in nearly every state and is priced per $100 of payroll by job-class risk — a desk job might run well under 1%, while roofing or trucking can run double digits. On top of that sit voluntary but common costs: health insurance, a retirement match, paid time off, and payroll-processing fees. Add it all up and the fully loaded cost of an employee commonly lands at 1.25 to 1.4 times the base wage. When you model a new hire's affordability or set a billing rate for client work, start with the payroll-tax figure this tool produces, then layer workers' comp and benefits on top to get the real number.
The gross FUTA rate is 6.0% on the first $7,000 of each employee's annual wages. Employers who pay state unemployment tax on time get a 5.4% credit, lowering the effective rate to 0.6%, or a maximum of $42 per employee per year.
SUTA is the state-level unemployment insurance tax employers pay. Each state sets its own taxable wage base and rate, and established employers receive an experience rating based on their layoff history.
FUTA is paid entirely by the employer. SUTA is also employer-paid in almost every state, with a few states requiring a small employee contribution.
Mandatory employer payroll taxes (7.65% FICA, ~0.6% FUTA, plus SUTA) typically add 8%–12% on top of wages before any benefits, workers' compensation, or overhead.
FUTA is reported annually on Form 940, due January 31. If your accumulated FUTA liability exceeds $500 in a quarter, you must deposit it by the last day of the month following that quarter.
When a state borrows from the federal government for unemployment benefits and does not repay in time, the IRS reduces that state's FUTA credit, raising the effective FUTA rate above 0.6% until the loan is repaid.