Employer Payroll Taxes Calculator
Estimate the employer payroll taxes associated with employee wages, including employer Social Security, Medicare and FUTA taxes.
Enter your employee count, wages and payroll frequency
to estimate employer payroll taxes.
What Is an Employer Payroll Taxes Calculator?
An employer payroll taxes calculator is a free online tool that helps employers estimate the payroll taxes they may be responsible for when paying employees. By entering employee count, average wages, payroll frequency, and tax year, you can get a quick estimate of employer Social Security, Medicare, and FUTA tax obligations.
Understanding employer payroll tax costs is important for budgeting and business planning. This employer payroll taxes calculator provides a simplified estimate based on current federal tax rules, helping you understand the total cost of employment.
The calculator distinguishes between employer-paid payroll taxes (Social Security, Medicare, FUTA) and employee payroll taxes, focusing specifically on the employer's share.
What Payroll Taxes Do Employers Pay?
Employers generally pay several federal payroll taxes on employee wages:
- Employer Social Security Tax — 6.2% of wages up to the annual wage base ($168,600 for 2026).
- Employer Medicare Tax — 1.45% of all wages (no wage base limit).
- FUTA Tax — Federal unemployment tax on the first $7,000 of wages per employee (after applicable credits).
Employers also may have state unemployment tax obligations and other payroll-related costs. This calculator focuses on federal employer payroll taxes.
How Is Employer Payroll Tax Calculated?
The basic calculation for employer payroll taxes involves several steps:
Gross Wages → Employer Social Security (6.2% up to wage base)
Gross Wages → Employer Medicare (1.45% of all wages)
Wages up to $7,000 → FUTA (after applicable credit)
The calculator annualizes wages based on the selected payroll frequency and applies the appropriate rates and limits for the selected tax year.
What Is the Employer Share of Social Security Tax?
Employers generally pay a 6.2% Social Security tax on employee wages up to the annual wage base. Key points include:
- Rate — 6.2% for 2026.
- Wage base — $168,600 for 2026.
- Employee portion — Employees pay 6.2% as well.
- Total — 12.4% combined employer and employee.
Once an employee's wages exceed the Social Security wage base, no additional Social Security tax is due on the excess wages. This calculator applies the wage base when estimating employer Social Security tax.
What Is Employer Medicare Tax?
Employers generally pay a 1.45% Medicare tax on all employee wages. Key points include:
- Rate — 1.45% for 2026.
- No wage base — Unlike Social Security, there is no annual wage base limit.
- Employee portion — Employees pay 1.45% as well.
- Additional Medicare Tax — This applies to employees, not employers.
Medicare tax is calculated on all wages, without the Social Security wage base limitation. This calculator applies the Medicare rate to all estimated wages.
What Is FUTA Tax?
FUTA (Federal Unemployment Tax Act) is an employer-only tax that funds federal unemployment programs. Key points include:
- Rate — 6.0% maximum rate, reduced to 0.6% with standard credit.
- Wage base — $7,000 per employee for 2026.
- Credit — Up to 5.4% credit for state unemployment tax payments.
- Employer only — FUTA is not deducted from employee wages.
This calculator allows you to choose whether the standard FUTA credit applies. The actual FUTA rate can vary based on state unemployment tax payments and other circumstances.
Example Employer Payroll Tax Calculation
Hypothetical Scenario: 5 employees, $4,000 monthly average wages.
| Employees | 5 |
| Average Monthly Wage | $4,000 |
| Annual Gross Payroll | $240,000 |
| Employer Social Security (6.2%) | $14,880 |
| Employer Medicare (1.45%) | $3,480 |
| FUTA (0.6% after credit) | $210 |
| Total Employer Payroll Taxes | $18,570 |
| Total Employer Payroll Cost | $258,570 |
| Employer Tax Percentage | 7.74% |
Employer Payroll Taxes vs Employee Payroll Taxes
| Tax | Employer | Employee |
|---|---|---|
| Social Security | 6.2% (up to wage base) | 6.2% (up to wage base) |
| Medicare | 1.45% (all wages) | 1.45% (all wages) |
| Additional Medicare | Not applicable | 0.9% (above threshold) |
| Federal Income Tax | Not an employer tax | Withheld from wages |
| FUTA | Employer-only tax | Not applicable |
What Employer Payroll Costs Are Not Included?
Several employer costs are not included in this calculator:
- State unemployment taxes — Vary by state and employer experience rating.
- State income tax obligations — Employer withholding for state income taxes.
- Local payroll taxes — City, county, or other local taxes.
- Workers' compensation — Insurance costs vary by state and industry.
- Employee benefits — Health insurance, retirement contributions, etc.
- Paid leave — Sick leave, vacation, and other paid time off.
- Other employer costs — Training, equipment, and other employment-related expenses.
Payroll Records Employers Should Keep
Employers should maintain accurate payroll records:
- Payroll registers — Records of all wage payments.
- Employee wage records — Individual employee wage information.
- Tax deposits — Records of federal tax deposits.
- W-2 records — Year-end wage and tax statements.
- W-3 records — Transmittal of wage and tax information.
- 941 records — Quarterly federal tax returns.
- FUTA records — Unemployment tax records.
- State unemployment records — State unemployment tax filings.
Common Employer Payroll Tax Mistakes
- Using outdated tax rates — Tax rates and limits change annually.
- Ignoring Social Security wage limits — Wages above the wage base are not subject to Social Security tax.
- Confusing employee and employer taxes — Employee income tax withholding is not an employer payroll tax.
- Miscalculating FUTA — FUTA is based on the first $7,000 of wages per employee.
- Ignoring state unemployment taxes — State rates vary and must be paid separately.
- Not keeping payroll records — Records are essential for tax compliance.
- Missing payroll filing deadlines — Late filings can result in penalties.
What This Employer Payroll Tax Calculator Does Not Include
- State unemployment taxes — Vary by state and are not included.
- State income taxes — Employer state withholding is not included.
- Local payroll taxes — Local taxes are not included.
- Workers' compensation — Insurance costs are not included.
- Employee benefits — Benefits are not included.
- Complete FUTA credit eligibility — Credit depends on state payments.
- Every employee's individual wage history — Average wages are used.
- Payroll filing obligations — Filing requirements are not calculated.
- Penalties or interest — Not included in the estimate.
Frequently Asked Questions
Employers generally pay Social Security tax (6.2% up to the wage base), Medicare tax (1.45% of all wages), and FUTA (federal unemployment tax on the first $7,000 of wages per employee after applicable credits).
For 2026, the employer Social Security tax rate is 6.2% of wages up to the annual wage base of $168,600.
Yes. Employers generally pay a 1.45% Medicare tax on all employee wages, with no wage base limit.
FUTA (Federal Unemployment Tax Act) is an employer-only tax that funds federal unemployment programs. The tax is generally 6.0% of the first $7,000 of wages per employee, reduced to 0.6% with the standard credit.
FUTA generally applies to most employees, but there are exceptions. The tax is based on the first $7,000 of wages per employee. This calculator applies the standard FUTA rules for estimation purposes.
Yes. Employer Social Security tax is only due on wages up to the annual wage base ($168,600 for 2026). Wages above this amount are not subject to Social Security tax.
No. Federal income tax withholding is generally an employee deduction, not an employer payroll tax expense. Employers withhold it from employee wages and remit it to the IRS.
No. This calculator estimates federal employer payroll taxes only. State unemployment taxes, state income tax withholding, and other state requirements are not included.
Employer payroll taxes typically add approximately 7-8% to gross wages (6.2% Social Security + 1.45% Medicare + 0.6% FUTA with credit). This calculator shows the estimated total employer payroll tax cost as a percentage.
No. This calculator provides an educational estimate based on simplified assumptions. Actual payroll tax obligations may vary based on employee wages, tax year, FUTA eligibility, state requirements, and other factors.
Yes. Employer payroll taxes (Social Security, Medicare, FUTA) are paid by the employer. Employee payroll withholding (income tax, employee Social Security, employee Medicare) is deducted from employee wages.
Employers should keep payroll registers, employee wage records, tax deposit records, W-2 forms, W-3 forms, 941 returns, FUTA records, and state unemployment records.
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