How to use this calculator
Every payroll carries employer taxes on top of gross wages, and they have to be deposited on a schedule. Small employers moving from a spreadsheet to a payroll provider often underestimate these amounts when they forecast cash. This calculator estimates the employer's share for a year and per payroll.
It covers federal taxes and state unemployment insurance. It doesn't calculate the employee's withholding, which comes out of their paycheck. For the full cost of a hire, including benefits, use the employee cost calculator. Our guide to running payroll walks through deposits and filings.
- Enter annual wages for one employee, or the average for a group.
- Enter how many employees earn that amount.
- Enter your state unemployment rate and wage base from your state's rate notice.
- Pick your pay frequency to see the employer tax per payroll.
How it's calculated
Social Security = 6.2% x the lesser of wages or $184,500 (2026 wage base)
Medicare = 1.45% x all wages
FUTA = 0.6% x the lesser of wages or $7,000, so $42 per employee at most for employers with the full state credit
SUTA = state rate x the lesser of wages or the state wage base
Effective rate = total employer tax / total wages
Worked example
A 10-person design studio pays everyone about $60,000. Each employee costs $3,720 in Social Security, $870 in Medicare, $42 in FUTA, and $189 in state unemployment tax at 2.7 percent on a $7,000 base. That's $4,821 per employee, $48,210 for the team, or $1,854.23 on each biweekly payroll. The effective employer rate is 8.0 percent of wages.
A senior engineer earning $200,000 shows how the wage base caps things. Social Security stops at $184,500 of wages, so the employer pays $11,439 rather than $12,400, while Medicare still applies to every dollar.
Rules to know
Employers report Social Security, Medicare, and withheld income tax on Form 941 each quarter and FUTA on Form 940 each year. Deposits follow a monthly or semiweekly schedule based on your lookback period. Missed or late deposits carry penalties, and the trust fund recovery penalty can make owners personally liable for unpaid withheld taxes.
FUTA's 0.6 percent effective rate assumes the full 5.4 percent credit for state unemployment taxes paid on time. Employers in credit reduction states pay more. Some states, including California, New Jersey, New York, and Rhode Island, also have disability or paid family leave programs that may involve employer contributions, and some localities add their own payroll taxes.
This is general information for US employers, not legal or tax advice. Rates and rules change and vary by state and city, so confirm current figures with the agency or a qualified advisor.
Common mistakes
- Forgetting to stop Social Security tax at the wage base, or resetting it mid-year for a rehire.
- Using last year's state unemployment rate after a new rate notice arrives.
- Treating the employee's withholding as employer tax in a budget.
- Missing deposit deadlines when payroll is run by hand.
Email templates that go with this
Once you have the number, these templates help you explain it to employees, candidates, or managers.
Where to go from here
A calculator answers one question. The right process and software keep the numbers right every pay period.
State rules behind this calculation
- Paid sick leave and paid family leave laws by stateState paid sick leave mandates and state-run paid family and medical leave programs, side by side.
- Minimum wage by state in 2026Every state rate in one table, checked against the US Department of Labor, with the increases already scheduled for 2027.
Build the skills behind this calculation
- Payroll certificationPayroll certification in 2026.
- CPP: Certified Payroll Professional$419 to $609. One of: 3 years of payroll practice in the 5 years before applying; 24 months of payroll practice plus approved PayrollOrg coursework; or the FPC, 18 months of payroll practice, and approved coursework.
Frequently asked questions
What percentage does an employer pay in payroll taxes?
What is the Social Security wage base for 2026?
Does the employer pay the additional Medicare tax?
How much is FUTA per employee?
Written by the HRTally Research Team
Our guides are written and reviewed by people with hands-on US HR, payroll, and HR technology experience. Legal and tax facts are checked against primary sources, such as the Department of Labor, IRS, EEOC, and USCIS, and linked at the end of each guide. Vendors never review or pay for our editorial content.