2026 employer payroll tax calculator

What an employer pays on top of wages

The Social Security and Medicare lines on a pay stub are only half the bill. As the employer, you match them: 6.2 percent for Social Security on each employee's wages up to $184,500, and 1.45 percent for Medicare with no cap. The extra 0.9 percent Medicare tax on high earners comes from the employee alone, so it never appears here. On a $60,000 salary, that match and federal unemployment tax come to $4,632.00, or about 7.7 percent on top of pay, before any state tax.

How federal unemployment tax works

The federal rate is 6.0 percent on the first $7,000 you pay each employee, which sounds like $420 per person. Most employers pay far less, because paying state unemployment tax in full and on time earns a credit of up to 5.4 percent. That leaves 0.6 percent, or $42 per person, which is what this calculator assumes.

Two things can raise it. Paying your state tax late can shrink the credit, and so can being in a state that has not repaid its federal unemployment loans, known as a credit reduction state. The Department of Labor lists those states each year, and the reduction is settled when you file Form 940.

Why the state line is yours to fill in

State unemployment tax depends on your own record. Each state sets a taxable wage base, and each employer gets a rate that usually reflects its size, age, and past layoffs, so two businesses across the street can pay different amounts. A guess would mislead you more than a blank, so we ask for the two figures from your state's rate notice. New employers usually get a standard new-business rate from the state.

This calculator covers payroll taxes only. Workers' compensation insurance, health coverage, and retirement matches are real costs too, and they vary too much to estimate here. It also leaves out local payroll taxes that some cities and transit districts charge employers. To see the worker's side of the same pay, try the paycheck calculator, and use the time card calculator for hourly staff.