Payroll tax calculator 2026

Most payroll calculators show one side of the bargain. This one shows both: what comes out of the employee's pay, and the Social Security, Medicare, FUTA and state unemployment the employer owes on top of the wage. The gap between the two is what a hire actually costs.

Cost of employment

$64,875

$60,000 of wages plus $4,875 of employer payroll tax, which is 8.1% on top. The employee takes home $50,390, or $1,938 per paycheck.

Employee take-home 78%
Employee tax 15%
Employer tax 8%

Employer pays: $4,875
Employee pays: $9,610
Combined tax: $14,485
Employee net: $50,390

What the employer pays

Social Security6.2%, matched, up to $184,500	$3,720
Medicare1.45%, matched. The 0.9% surtax is employee-only	$870
FUTA0.6% of the first $7,000 after the 5.4% state credit	$42
State unemployment2.7% of the first $9,000	$243
Total	$4,875

What comes out of the employee's pay

Federal income taxWithheld from the employee under Publication 15-T	$5,020
Social Security6.2% up to $184,500	$3,720
Medicare1.45%, plus 0.9% above $200,000	$870
Texas income taxNo state income tax on wages	$0
Total	$9,610

Employer figures cover the four federal and state payroll taxes every employer owes on wages. They do not include workers' compensation premiums, state disability or paid-leave programmes where the employer pays a share, local payroll taxes, or benefits. The employee side spreads the annual liability evenly across pay periods rather than following Publication 15-T, so it will not match a payslip to the cent.

Why the employer's half is the half nobody sees

An employee looks at a payslip and sees Social Security and Medicare taken out. The employer pays the same amounts again, and the payslip never mentions it. Add federal and state unemployment, which the employee never pays at all, and the true cost of a $60,000 salary is closer to $64,875 before anyone has bought a laptop.

The employer's share falls as a percentage as salaries rise, because three of the four taxes stop. Social Security stops at the $184,500 wage base, federal unemployment stops after $7,000, and state unemployment stops at each state's own base. Only Medicare runs on every dollar. That is why the marginal cost of a raise is lower than the average cost of the salary.

Frequently asked questions

How to calculate payroll taxes

Payroll tax has two halves. The employer owes 6.2% Social Security up to the $184,500 wage base, 1.45% Medicare on all wages, 0.6% federal unemployment on the first $7,000, and state unemployment at its own rate on its own wage base. The employee pays a matching 6.2% and 1.45%, plus federal income tax and any state income tax. On $60,000 of wages in Texas at a 2.7% state unemployment rate the employer side is $4,875 and the employee side is $9,610.

What payroll taxes does the employer pay that the employee does not?

Federal and state unemployment tax. FUTA is 6.0% on the first $7,000 of each employee's wages, but an employer that pays its state unemployment tax on time credits 5.4% of that, leaving 0.6% and a maximum of $42 a year per employee. State unemployment is experience-rated, so your rate depends on your own claims history. Employees pay neither.

Do employers pay the additional Medicare tax?

No. The extra 0.9% Medicare tax above $200,000 is employee-only. The employer withholds it but does not match it, unlike the ordinary 1.45%, which is matched on every dollar with no wage cap at all.

How much does an employee really cost?

Wages plus the employer's payroll taxes, which run about 8.1% on top at $60,000, and less as a percentage at higher salaries because Social Security and both unemployment taxes stop at their wage bases. On $60,000 that is $64,875 before benefits, workers' compensation or equipment.

What is the state unemployment wage base?

The slice of each employee's annual wages that state unemployment tax applies to. It varies more than any other payroll figure, from the $7,000 federal floor in states like California and Florida to over $70,000 in Washington. This calculator uses each state's own base and asks you for your rate, because the rate is set per employer and nobody can guess it for you.

Is this the same as withholding on a payslip?

Not quite. The employer taxes are exact, because they are flat rates on wage bases. The employee's federal and state income tax is the annual liability spread evenly across pay periods, whereas your payroll software follows Publication 15-T and the employee's W-4, so individual cheques differ and settle up when they file.

Hadi · Developer and maintainer

Federal tables checked against the IRS 2026 inflation adjustments on 2026-09-03. State figures, where quoted, are each state's latest published schedule, 2025; federal figures are 2026.

Payroll tax calculator 2026