Employer Payroll Tax Calculator
Calculate employer-side payroll taxes including FICA, FUTA, SUTA, and Medicare. Enter values for instant results with step-by-step formulas.
Reviewed by Sahil, Senior Finance & Tax Editor
Formula
Total = (SS Rate x min(Wages, SS Base)) + (Medicare Rate x Wages) + (FUTA Rate x min(Wages, $7,000)) + (SUTA Rate x min(Wages, State Base))
Employer payroll taxes are the sum of Social Security tax (6.2% up to the wage base), Medicare tax (1.45% on all wages), FUTA (0.6% on first $7,000), and SUTA (state-specific rate on state wage base). Each component has its own wage base cap.
Worked Examples
Example 1: Small Business with 5 Employees at $55,000
Problem:A small business has 5 employees each earning $55,000 annually. The state SUTA rate is 2.7% on a $7,000 wage base. Calculate total employer payroll taxes.
Solution:Per employee:\nSocial Security: $55,000 x 6.2% = $3,410\nMedicare: $55,000 x 1.45% = $797.50\nFUTA: $7,000 x 0.6% = $42\nSUTA: $7,000 x 2.7% = $189\nTotal per employee: $3,410 + $797.50 + $42 + $189 = $4,438.50\nTotal for 5 employees: $4,438.50 x 5 = $22,192.50
Result:Per Employee: $4,438.50/year | All 5 Employees: $22,192.50/year | Effective Rate: 8.07%
Example 2: High-Salary Employee Over SS Wage Base
Problem:An employer has 1 employee earning $200,000 with a state SUTA rate of 1.5% on a $10,000 wage base. Calculate total employer payroll taxes.
Solution:Social Security: $168,600 x 6.2% = $10,453.20 (capped at wage base)\nMedicare: $200,000 x 1.45% = $2,900\nFUTA: $7,000 x 0.6% = $42\nSUTA: $10,000 x 1.5% = $150\nTotal: $10,453.20 + $2,900 + $42 + $150 = $13,545.20\nEffective rate: $13,545.20 / $200,000 = 6.77%
Result:Total Employer Tax: $13,545.20/year | Effective Rate: 6.77% | Monthly Cost: $1,128.77
Frequently Asked Questions
What payroll taxes must employers pay?
Employers in the United States are required to pay several types of payroll taxes on behalf of their employees. The largest component is the employer share of FICA taxes, which includes Social Security tax at 6.2% of wages up to the annual wage base ($168,600 for 2024) and Medicare tax at 1.45% of all wages with no cap. Employers must also pay Federal Unemployment Tax (FUTA) at 6.0% on the first $7,000 of each employee's wages, though a credit of up to 5.4% is available if state unemployment taxes are paid on time, reducing the effective rate to 0.6%. State Unemployment Tax (SUTA) rates and wage bases vary by state and employer experience rating. These employer-side taxes are separate from the amounts withheld from employee paychecks.
How is the Social Security tax calculated for employers?
The employer Social Security tax is calculated at a flat rate of 6.2% on each employee's wages up to the annual Social Security wage base, which is $168,600 for the 2024 tax year. This wage base is adjusted annually based on changes in the national average wage index. Once an employee's cumulative wages for the year exceed the wage base, no additional Social Security tax is owed for the remainder of the year. For example, if an employee earns $100,000 annually, the employer owes $6,200 in Social Security tax ($100,000 x 6.2%). If an employee earns $200,000, the employer only owes $10,453.20 ($168,600 x 6.2%) because wages above the base are exempt. The employee also pays 6.2% from their wages, making the combined rate 12.4%.
What is FUTA tax and how does the credit reduction work?
Federal Unemployment Tax Act (FUTA) tax is an employer-only tax that funds the federal unemployment insurance system. The statutory FUTA rate is 6.0% on the first $7,000 of each employee's annual wages, which would amount to $420 per employee. However, employers who pay their state unemployment taxes on time receive a credit of up to 5.4%, reducing the effective FUTA rate to just 0.6% or $42 per employee per year. Some states have outstanding federal unemployment loans that trigger a credit reduction, meaning employers in those states pay a higher effective FUTA rate. The maximum FUTA tax per employee remains modest, but for businesses with many employees, these costs add up significantly over the course of a year.
What is the total cost of employer payroll taxes as a percentage of wages?
The total employer payroll tax burden typically ranges from 7.65% to 10% or more of gross wages, depending on the employee's salary level and state unemployment tax rates. At minimum, employers owe 7.65% for the combined FICA taxes (6.2% Social Security plus 1.45% Medicare) on wages below the Social Security wage base. FUTA adds a small 0.6% on the first $7,000 of wages, and SUTA rates add another 0.5% to 5% or more depending on the state and employer experience rating. For a $55,000 salary, the effective employer tax rate is typically around 8.5% to 9.5%, adding roughly $4,700 to $5,200 in payroll taxes per employee. This means for every dollar paid in wages, employers should budget an additional 8 to 10 cents for payroll taxes alone.
References
Reviewed by Sahil, Senior Finance & Tax Editor · Editorial policy