What are the payroll tax rates for 2026?

Social Security is 6.2% each from employee and employer on wages up to $184,500. Medicare is 1.45% each with no cap. Employees also pay 0.9% Additional Medicare above $200,000 single or $250,000 joint, with no employer match. Employers pay FUTA at 0.6% on the first $7,000 after the standard state credit.

What does an employee actually cost?

On a $60,000 salary, roughly $64,900 before benefits — $4,590 in matched payroll taxes, $42 FUTA, plus state unemployment. Adding health insurance, retirement matching and paid leave typically brings total loaded cost to 25–40% above salary.

Who really pays the employer share?

Economically, most analysis concludes workers bear it through lower wages, since it forms part of the total cost of employing someone. That is the reasoning behind self-employed people paying both halves — they are seeing the full cost directly rather than being charged extra.

How often do I need to deposit payroll taxes?

Monthly or semi-weekly, determined by your prior-year liability during a lookback period. Form 941 reports quarterly; some small employers file Form 944 annually instead. Because the schedule can change as the business grows, this is the aspect most worth outsourcing to a payroll service.

Payroll Tax Calculator 2026 — Employer & Employee

Q: Why does Social Security tax stop at a wage base?

Because the benefit it funds is also capped. Contributions above the base would buy no additional benefit, so the tax stops where the benefit calculation stops. Medicare has no cap because its benefit is not earnings-related.

Q: What happens if I do not remit withheld payroll taxes?

Withheld amounts are trust fund money belonging to the government from the moment of withholding. Failure to remit triggers the Trust Fund Recovery Penalty, which can be assessed personally against owners and officers rather than only the business — one of the few liabilities that reaches through the corporate structure.

2026 FICA rates · SS wage base $184,500

Calculate employer payroll taxes (SS, Medicare, FUTA, SUTA) and employee FICA withholding for any wage. See the true cost of hiring.

Gross Wage

Pay Period

Employee 401(k) Contribution ($)

Annual Gross Wage

$85,000

Employee FICA

$6,503

Employer Taxes

$6,734

Total Labor Cost

$91,734

Employee Take-Home

$73,498

Payroll Tax Distribution

Employee SS (6.2%)

$5,270

Employee Medicare (1.45%)

$1,233

Employer SS (6.2%)

$5,270

Employer Medicare (1.45%)

$1,233

FUTA (0.6%)

$42

SUTA (~2.7%)

$189

Employer Cost Breakdown

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This tool is for educational purposes only and does not constitute financial, tax, or investment advice. Consult a qualified financial professional for advice specific to your situation.

Analysis & insights

Your employer total is $6,734, based on the inputs above. Tax outcomes drive the math behind nearly every other financial decision — savings rate, affordability, retirement.

Quick estimate

This calculator uses just a few inputs. Adjust them to see how each variable shifts the answer.

Risk & benchmark gauge

Current band

Strong

Employer Total: $6,734

0255075100

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Industry benchmarks

Annual Gross$85,000
Employee S S$5,270
Employee Medicare$1,233
Employee F I C A$6,503
Employer S S$5,270
Employer Medicare$1,233

Key insights

Pre-tax contributions reduce taxable income

Every dollar to 401(k), HSA, or traditional IRA reduces taxable income at your marginal bracket — typically 12-32% federal.

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What is Payroll Taxes?

Payroll taxes fund Social Security, Medicare and unemployment insurance. They are separate from income tax, they are charged at flat rates rather than progressive brackets, and they are split between employer and employee in a way that obscures who actually bears them.

The split is the concept worth understanding. An employer paying a $60,000 salary does not spend $60,000 — they spend roughly $64,600 once their share of payroll taxes is counted. The employee sees $60,000 as their salary and never encounters the difference.

Economists generally hold that the employer share is ultimately borne by the worker in the form of lower wages, since it is part of the total cost of employing them. That is why self-employed people pay both halves without it being considered a penalty: they are simply seeing the whole cost directly.

The formula — how to calculate Payroll Taxes

Social Security = Wages up to $184,500 × 6.2% (each side) Medicare = All wages × 1.45% (each side) Additional Medicare = Wages above $200k single / $250k joint × 0.9% (employee only) FUTA = First $7,000 of wages × 0.6% after credit (employer only)

$184,500: = the 2026 Social Security wage base — earnings above it are exempt from the 6.2%
$7,000: = the FUTA wage base, set in statute and unchanged since 1983
0.6%: = the effective FUTA rate after the standard 5.4% state credit; the gross rate is 6.0%

Only the employee pays the Additional Medicare Tax. There is no employer match on it, which makes it the one payroll tax that is not split.

Step-by-step example

01An employee earning $60,000 in 2026.
02Social Security: $60,000 × 6.2% = $3,720 withheld from the employee, and $3,720 paid by the employer.
03Medicare: $60,000 × 1.45% = $870 each side.
04Employee total: $4,590 withheld, which is 7.65% of salary.
05Employer total: $4,590 matched, plus FUTA of $7,000 × 0.6% = $42, plus state unemployment tax which varies by state and claims history.
06True cost of employment: roughly $60,000 + $4,590 + $42 + state UI ≈ $64,900 before benefits.
07Now an employee earning $250,000. Social Security stops at $184,500: $184,500 × 6.2% = $11,439 each side.
08Medicare continues on all of it: $250,000 × 1.45% = $3,625 each side.
09The employee also pays Additional Medicare on the amount above $200,000: $50,000 × 0.9% = $450, with no employer match.

Why the wage base exists

Social Security is capped because the benefit it funds is also capped. Contributions above the wage base would buy no additional benefit, so the tax stops where the benefit calculation stops.

Medicare has no cap because its benefit is not earnings-related — everyone eligible receives the same coverage regardless of what they contributed. The Additional Medicare Tax introduced above $200,000 breaks this symmetry deliberately, functioning as a progressive surcharge rather than a contribution.

The practical effect is that payroll tax is regressive across the range where the cap binds. Someone earning $184,500 pays 7.65% of their whole salary; someone earning $500,000 pays roughly 3.7% in Social Security and Medicare terms before the surcharge. This is one reason payroll tax is often analysed separately from income tax when discussing overall tax burden.

Payroll tax rates for 2026

Tax	Employee	Employer	Wage base
Social Security	6.2%	6.2%	$184,500
Medicare	1.45%	1.45%	No limit
Additional Medicare	0.9%	None	Above $200k / $250k
FUTA	None	0.6% after credit	$7,000
SUTA (state)	Varies by state	Usually employer	Varies

A few states require employee contributions to unemployment or disability funds. FUTA's $7,000 base has not changed since 1983, so it now applies to only a small fraction of most salaries.

What the employer actually pays

The employer share is the part most employees never see, and it is substantial enough to change how job offers should be read.

On a $60,000 salary the employer pays roughly $4,632 in payroll taxes alone. Add health insurance, retirement matching, workers' compensation insurance and paid leave, and the loaded cost of an employee commonly runs 25–40% above salary.

This is the practical reason contract rates need to exceed salaried hourly equivalents. A contractor charging the same hourly rate as a salaried employee earns is absorbing all of that loaded cost themselves.

It also explains why employers think in terms of total compensation rather than salary when budgeting a hire, and why a request framed around total cost sometimes lands better than one framed purely as salary.

Withheld payroll tax is trust fund money

Amounts withheld from employee pay belong to the government from the moment they are withheld — the employer holds them in trust. Failing to remit them carries the Trust Fund Recovery Penalty, which can be assessed personally against owners and officers rather than only against the business. It is one of the few tax liabilities that pierces the corporate structure.

Filing and deposit obligations

Payroll tax involves a schedule of deposits and returns that is separate from, and more frequent than, income tax filing.

Employment taxes are deposited either monthly or semi-weekly depending on the size of your prior-year liability. Form 941 reports them quarterly; smaller employers may qualify to file Form 944 annually instead. FUTA is reported on Form 940 annually. W-2s go to employees and the Social Security Administration by 31 January.

Penalties for late deposits escalate with the delay, and the schedule is determined by a lookback period rather than by current circumstances — so a growing business can find its deposit frequency changes without warning.

For most small employers, a payroll service is worth its fee purely for handling this calendar correctly. The tax itself is arithmetic; the compliance schedule is where errors and penalties actually arise.

Key considerations

Budget 7.65% above salary for payroll taxes, plus FUTA and state unemployment.
Total loaded cost of an employee typically runs 25–40% above salary once benefits are included.
The Social Security wage base rises most years; check the current figure each January.
Only the employee pays the Additional Medicare Tax — there is no employer match.
Deposit schedules depend on a lookback period and can change as the business grows.
Withheld tax is trust fund money and carries personal liability if unremitted.
State unemployment rates vary with your claims history, so layoffs raise future costs.

Common mistakes to avoid

Budgeting only salary and omitting the roughly 7.65% employer match plus unemployment tax.
Missing deposit deadlines, where penalties escalate quickly with delay.
Treating withheld payroll tax as available business cash flow.
Misclassifying employees as contractors to avoid the employer share — a frequently audited area with substantial back-tax exposure.
Forgetting the wage base resets every January, so high earners see withholding restart.
Overlooking state unemployment obligations, which vary by state and by employer history.

Frequently asked questions

Sources & references

Written and fact-checked by the CalcProLabs Editorial Team against IRS Publication 15 and SSA 2026 wage base. Read our calculation methodology and editorial policy.

Last updated July 28, 2026