Calculate employee and employer payroll taxes for 2026 — Social Security, Medicare, FUTA, and state taxes. See the true cost of an employee.
Payroll taxes in 2026 include Social Security (6.2% employee + 6.2% employer) on wages up to $184,500, Medicare (1.45% each) on all wages, Additional Medicare (0.9% employee only) on wages over $200,000 single/$250,000 married, FUTA (0.6% effective) on the first $7,000, and SUTA which varies by state. Use the calculator above to see both the employee deduction view and the full employer cost breakdown.
Payroll taxes are calculated separately from federal income tax and follow fixed percentage rules rather than graduated brackets. Each pay period, your employer applies Social Security at 6.2% to your gross wages (up to the annual wage base of $184,500 in 2026), Medicare at 1.45% on all wages, and then remits a matching amount from their own funds. The employer never reduces the employee's paycheck by the employer FICA match — it comes directly from the business's operating funds on top of your salary.
Social Security taxes stop mid-year for high earners. An employee earning $220,000 annually will exhaust the $184,500 wage base around September. For the remaining months, neither the employee nor employer pay Social Security, resulting in meaningfully larger paychecks in the fourth quarter. Medicare, however, never stops — it applies to all wages for the entire year with no cap, and high earners face an additional 0.9% surcharge.
FUTA (Federal Unemployment Tax) is an employer-only obligation at an effective 0.6% on the first $7,000 of wages per employee per year. SUTA (State Unemployment Tax) varies by state and employer experience rating, typically ranging from 1% to 5%. These are often overlooked when budgeting for new hires but add real cost to every employee relationship.
Samantha earns $130,000 annually (bi-weekly: $5,000/check), is a single filer in Arizona, and has $0 in YTD wages at the start of the year.
Samantha will hit the $184,500 Social Security wage base at paycheck 37 (approximately mid-October). From that point forward, her Social Security deduction drops to $0 and her employer's SS match also stops — both Samantha and her employer see savings in the final months of the year.
Social Security Wage Base
The 2026 Social Security wage base is $184,500. This threshold is adjusted annually for inflation and rises most years. The 6.2% employee and 6.2% employer Social Security taxes both stop once cumulative wages exceed this amount. For employees earning over $184,500, this creates a paycheck boost mid-year. Employers must track each employee's cumulative wages carefully to avoid over-withholding.
Employer vs. Employee Tax Responsibility
Employees see only their half of FICA on their paychecks, but the employer pays an equal amount from business funds. This employer cost is often invisible to employees but critical for business owners. Self-employed individuals pay both halves as self-employment tax (15.3% on 92.35% of net income), though they deduct half of SE tax as an above-the-line adjustment on their federal return.
SUTA (State Unemployment Tax)
SUTA rates vary significantly by state and by individual employer experience rating. New employers typically start at a standard rate (often 2–4%) and their rate adjusts annually based on how many former employees filed unemployment claims. In high-turnover industries, SUTA can significantly impact total payroll costs. The calculator uses a 3% SUTA estimate; your actual rate may vary.
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Payroll taxes are taxes withheld from employee paychecks and matched by employers to fund Social Security and Medicare. For 2026, employees pay 6.2% Social Security tax on wages up to $184,500 and 1.45% Medicare tax on all wages. Employers match these amounts dollar-for-dollar, effectively paying 7.65% on top of employee wages. High earners also pay an additional 0.9% Medicare surcharge on wages over $200,000 (single) or $250,000 (married), which employers do not match.
The Social Security wage base for 2026 is $184,500. Both the employee 6.2% Social Security tax and the employer 6.2% match apply only to the first $184,500 of wages per year. Once cumulative earnings exceed $184,500, Social Security withholding stops for the remainder of the year. This can result in noticeably larger paychecks in the second half of the year for higher earners. Medicare tax (1.45%) has no wage cap and applies to all wages throughout the year.
FUTA (Federal Unemployment Tax Act) is a 6% employer-only tax on the first $7,000 of each employee's annual wages. Employers who pay their state unemployment taxes (SUTA) on time receive a credit of up to 5.4%, making the effective FUTA rate 0.6% for most employers — just $42 per employee per year. FUTA is not withheld from employee paychecks; it is paid entirely by the employer. FUTA funds the federal unemployment insurance system.
The Additional Medicare Tax is a 0.9% surcharge on wages above $200,000 for single filers or $250,000 for married filing jointly. It is paid only by the employee — employers do not match this tax. Employers are required to begin withholding the additional 0.9% once an employee's wages exceed $200,000 in a calendar year, regardless of filing status. If a married couple's combined income exceeds $250,000, any additional Medicare tax shortfall is reconciled when they file their joint return.
When an employer pays an employee $75,000, the true cost is higher due to employer-side payroll taxes. The employer must also pay 6.2% Social Security ($4,650), 1.45% Medicare ($1,088), FUTA (up to $42), and SUTA (varies by state, typically 2–5%). On a $75,000 salary, this adds approximately $8,000–$10,000 in employer taxes, making the true all-in cost $83,000–$85,000. Understanding the true employer cost is critical for budgeting new hires, comparing contractor vs. employee scenarios, and pricing freelance services.