What does an employee actually cost beyond their salary?

In payroll tax alone, roughly 7.65 percent of wages up to the Social Security wage base, falling to 1.45 percent above it, plus FUTA on the first 7,000 dollars and state unemployment tax. Benefits, insurance, and workers compensation are additional.

Payroll Tax Calculator 2026

Q: Does the employer match the Additional Medicare Tax?

No. The 0.9 percent Additional Medicare Tax is withheld from the employee only. The employer must withhold it once wages pass 200,000 dollars but never pays a matching share.

Q: What happens if someone works two jobs?

The Social Security wage base applies separately to each employer, so an employee with two jobs can have more Social Security tax withheld than the annual maximum. The excess is claimed back as a credit on their tax return. Employers cannot coordinate this between themselves.

What this calculator estimates

Payroll tax is the set of taxes tied to wages rather than to income generally. This calculator works out each component for a given salary and shows who bears it — the employee through withholding, the employer as a cost of doing business, or both.

It is useful in two directions. If you are hiring, it tells you what a role costs beyond the advertised salary. If you are employed, it shows you the half of your payroll tax you never see on a payslip.

How to use it

Enter the annual wages one employer pays. The Social Security wage base applies per employer, so figures from two jobs should be entered separately.
Set the employee's filing status. This only affects the Additional Medicare Tax threshold.
If you are an employer, add your assigned state unemployment rate and wage base. Both are left blank by default rather than guessed.

How the calculation works

Social Security is charged at 6.2% to the employee and 6.2% to the employer, but only on wages up to the annual wage base. Above that, neither side pays another cent of it. This is why payroll tax is regressive as a share of pay: it stops, while income tax keeps climbing.

Medicare is charged at 1.45% to each side with no ceiling at all.

Additional Medicare Tax of 0.9% applies to the employee only. Employers must begin withholding it once an employee's wages pass $200,000 with them, regardless of that employee's filing status — which means a married couple can have it withheld and get it back at filing, or owe it and have had none withheld.

FUTA is employer-only, charged on the first $7,000 of each employee's wages. The headline rate is 6.0%, but employers who pay their state unemployment tax on time receive a credit of up to 5.4%, leaving a net 0.6%.

State unemployment tax is employer-only and assigned individually. Rates depend on the state, the industry, and how many claims former employees have made, so there is no national figure to publish.

A worked example

An employee on $95,000 with a state unemployment rate of 2.7% on a $9,000 wage base. Because $95,000 is below the wage base, all of it is subject to Social Security: $5,890 from each side. Medicare adds $1,377.50 each way. FUTA costs the employer $42, and state unemployment $243. The employee sees $7,267.50 withheld; the employer pays $7,552.50 on top of the salary, making the true cost of the role about $102,553.

Important limitations

Income tax withholding is not included — this covers payroll taxes only. Use the take-home pay calculator for the full paycheck.
Employers in credit-reduction states pay a higher effective FUTA rate than the 0.6% shown.
Some states levy additional employer or employee payroll taxes for disability or family leave programmes. These are not included.
Workers' compensation, benefits, and administrative costs are not payroll taxes and are not counted here.
Household and agricultural employers follow different rules.

Frequently asked questions

Does the employer match the Additional Medicare Tax?

No. It is the one FICA component with no employer share. The employer's only obligation is to withhold it once wages pass $200,000.

What does an employee really cost?

In payroll tax alone, about 7.65% of wages up to the Social Security wage base, dropping to 1.45% above it, plus FUTA and state unemployment on the first few thousand dollars. The results panel shows this as an "employer add-on" percentage.

What happens with two jobs?

Each employer applies the wage base independently, so someone with two well-paid jobs can have more Social Security tax withheld than the annual maximum. The excess is recovered as a credit on their tax return. The employers cannot coordinate, and neither can claim their own overpayment back.

Why does Social Security stop but Medicare does not?

Social Security benefits are capped, so the contributions that fund them are capped to match. Medicare has no equivalent benefit ceiling, so the tax applies to every dollar of wages.

Official sources

SSA contribution and benefit base — the Social Security wage base.
IRS Publication 15 (Circular E) — the employer's tax guide.
IRS Form 940 — the annual FUTA return.