Payroll Tax Calculator 2026: Employer Cost

	Employee pays	Employer pays
Social Security	$155.00	$155.00
Medicare	$36.25	$36.25
Federal income tax withheld	$216.15	—
California income tax (estimate)	$72.04	—
CA SDI (1.3%)	$32.50	—
FUTA	—	$52.50
SUTA	—	$85.00
Total	$511.95	$328.75

How to use this calculator

Enter one employee’s gross wages for this paycheck, before any deductions.
Pick the pay frequency and your state (where the employee works).
Enter wages paid earlier this year. This matters: Social Security, FUTA and SUTA each stop at a yearly wage limit, so the same paycheck is taxed differently in January than in November.
Under SUTA rate, keep the new-employer rate if you’re a new business, or switch to My assigned rate and enter the rate and wage base from your state’s annual rate notice. You can also enter a FUTA credit reduction there.
Optionally open Employee withholding to set the employee’s W-4 filing status.

You’ll see your taxes for this paycheck, the total cost of the paycheck, a full-year projection for this employee, and a table of who pays what.

Employer payroll taxes for 2026

Tax	Employer rate	Wages taxed per employee	Maximum per employee
Social Security	6.2%	First $184,500	$11,439
Medicare	1.45%	All wages	No limit
FUTA (net of credit)	0.6%	First $7,000	$42
SUTA	Varies by state	State wage base	Varies

The employee pays a matching 6.2% and 1.45% through withholding, plus a 0.9% Additional Medicare Tax on wages over $200,000 that employers withhold but don’t match.

The formula for each tax

Each capped tax applies only to the part of this paycheck that falls under the yearly limit:

Taxable = max (0, min (wages, wage base - YTD wages))

Then the tax is the taxable amount times the rate. For FUTA the rate is 6.0% minus the 5.4% credit, plus any credit reduction for your state.

Worked example

A California employer pays an employee $2,500 every two weeks, and this is the first paycheck of the year.

Social Security: $2,500 × 6.2% = $155.00
Medicare: $2,500 × 1.45% = $36.25
FUTA: $2,500 × (0.6% + 1.5% estimated California credit reduction) = $52.50
California SUTA at the 3.4% new-employer rate: $2,500 × 3.4% = $85.00

Total employer taxes are $328.75, so the paycheck really costs $2,828.75. On the employee’s side, about $216 of federal income tax, $191 of Social Security and Medicare, $72 of California income tax and $32.50 of California SDI are withheld, leaving take-home pay of about $1,988.

By the third paycheck of the year, this employee passes $7,000 in wages, and FUTA and California SUTA stop for the rest of the year.

A year of employer taxes by state

For an employee paid $65,000 a year at each state’s 2026 new-employer SUTA rate:

State	SUTA rate	SUTA wage base	FUTA	SUTA	Total employer taxes	% of wages
Arizona	2.0%	$8,000	$42	$160	$5,174.50	7.96%
Florida	2.7%	$7,000	$42	$189	$5,203.50	8.01%
Texas	2.7%	$9,000	$42	$243	$5,257.50	8.09%
Ohio	2.7%	$9,000	$42	$243	$5,257.50	8.09%
Georgia	2.64%	$9,500	$42	$250.80	$5,265.30	8.10%
North Carolina	1.0%	$34,200	$42	$342	$5,356.50	8.24%
California	3.4%	$7,000	$147	$238	$5,357.50	8.24%
Pennsylvania	3.822%	$10,000	$42	$382.20	$5,396.70	8.30%
Illinois	2.8%	$14,250	$42	$399	$5,413.50	8.33%
New York	4.025%	$17,600	$42	$708.40	$5,722.90	8.80%
New Jersey	2.8%	$44,800	$42	$1,254.40	$6,268.90	9.64%

Every row includes $4,972.50 of employer Social Security and Medicare. California’s FUTA is higher because of its estimated 2026 credit reduction. Washington, Minnesota, Utah, Montana, New Mexico, Wyoming and Louisiana give new employers an industry-average rate, so the calculator asks you to enter yours.

FUTA credit reductions

States that borrow from the federal unemployment trust fund and don’t repay by November 10 of the second year lose part of the 5.4% credit, and their employers make up the difference. The reduction grows by 0.3 points each year a loan stays outstanding.

2025 (final): California 1.2% and the U.S. Virgin Islands 4.5%. California employers paid up to $126 per employee ($7,000 × 1.8%).
2026 (estimated): California 1.5%, or up to $147 per employee. The Labor Department’s estimate notes California could also face a 3.8% benefit-cost-rate add-on unless it’s waived.

The extra tax for the year is due with your fourth-quarter FUTA deposit or Form 940, filed by January 31 of the next year (or the next business day).

Tips for employers

Budget about 8% to 10% above wages for payroll taxes alone, before health insurance, retirement contributions and workers’ compensation.
Front-loaded costs: FUTA and most SUTA taxes are paid on the first few thousand dollars of each person’s wages, so January through March costs more per paycheck than the rest of the year.
Pay SUTA on time. The full 5.4% FUTA credit depends on paying state unemployment tax by the Form 940 due date. Late payment cuts the credit.
Deposit FUTA quarterly once your undeposited FUTA tax is more than $500.
Contractors aren’t employees. If you pay yourself as a sole proprietor, you owe self-employment tax instead. To see what your employees take home, use the paycheck calculator.

Assumptions and limitations

New-employer SUTA rates are the base rates the U.S. Department of Labor lists for January 2026. Some states charge higher new-employer rates for certain industries (construction, for example) or add surcharges and other state payroll taxes that aren’t included. The 2026 FUTA credit reduction is the Labor Department’s estimate until the final list is published after November 10, 2026. Employee withholding is an estimate using IRS Publication 15-T (2026) with no dependents, extra withholding or pre-tax deductions, and state tax averaged across the year. Local payroll taxes aren’t included.

Sources

This calculator estimates payroll taxes for planning. Your payroll provider and your state’s rate notice determine the exact amounts.

Frequently asked questions

How much are employer payroll taxes in 2026?

Employers pay 6.2% Social Security tax on each employee's wages up to $184,500 and 1.45% Medicare tax on all wages. On top of that comes federal unemployment tax, usually $42 per employee a year, and state unemployment tax, which depends on your state's rate and wage base. For a $65,000 employee in Texas at the new-employer rate, the total is $5,257.50 a year.

What is the FUTA tax rate for 2026?

FUTA is 6.0% of the first $7,000 of each employee's wages, but employers who pay state unemployment tax on time get a credit of up to 5.4%. That leaves a net rate of 0.6%, or at most $42 per employee. Employers in a credit-reduction state pay more; California's 2026 reduction is estimated at 1.5%, for a net 2.1%.

Which states are FUTA credit-reduction states?

For 2025 the final list was California (1.2%) and the U.S. Virgin Islands (4.5%). For 2026 the Labor Department lists California as a potential credit-reduction state at an estimated 1.5%; the final list is set after November 10, 2026. The Virgin Islands repaid its federal loans in 2026.

What is SUTA and how is it calculated?

SUTA, or state unemployment insurance tax, is paid by employers on each employee's wages up to a state wage base, at a rate the state assigns. New employers get a standard rate (for example 2.7% on $9,000 in Texas or 3.4% on $7,000 in California for 2026), and established employers get a rate based on their history of layoffs and claims.

Do employees pay FUTA or SUTA?

FUTA is paid only by employers and is never withheld from wages. A few states also take an employee contribution for unemployment, disability or family leave, such as New Jersey's unemployment and disability withholding and California's SDI. The calculator shows those under the employee side.

Why are payroll taxes lower later in the year?

Because several taxes stop once an employee's wages for the year pass a limit. FUTA stops after $7,000, SUTA after the state wage base, and Social Security after $184,500. Medicare never stops. Enter the employee's year-to-date wages to see exactly what applies to this paycheck.

Updated November 2026. Results are estimates for educational purposes and depend on the inputs you provide.

Employer payroll taxes

Who pays what on this paycheck