Employer Payroll Tax Calculator
Calculate the employer-side payroll taxes for each employee — Social Security, Medicare, FUTA, and SUTA — and see the total tax burden for your entire team.
Employee & Company Info
SUTA for California: 3.40% on the first $7,000 of wages (estimated new-employer rate; your actual rate may differ based on experience rating).
Employer Tax BurdenAnnual
Automate payroll tax management for your team
Payroll tax compliance is complex and the penalties are steep. tinyteam handles tax calculations, filings, and reporting so you stay compliant without the spreadsheet headache.
Understanding Employer Payroll Taxes: The Full Guide
As an employer, you are required to pay payroll taxes on top of each employee's gross wages. These taxes fund Social Security, Medicare, and federal and state unemployment insurance programs. Unlike employee withholding — which is deducted from the worker's paycheck — employer payroll taxes are an additional cost that comes out of your business's pocket. For small businesses, understanding and budgeting for these taxes is essential to accurate financial planning and staying compliant with the IRS and state agencies.
Social Security Tax (OASDI) — Employer's Share
The employer pays 6.2% of each employee's wages toward Social Security, up to the annual wage base limit. In 2024, that limit is $168,600. Once an employee's year-to-date wages exceed this threshold, the employer stops paying Social Security tax on additional earnings. For an employee earning $75,000, the employer's Social Security contribution is $4,650 per year. For a high earner at $200,000, the maximum is capped at $10,453.20.
Medicare Tax — Employer's Share
Employers pay 1.45% of all employee wages toward Medicare with no income cap. Unlike Social Security, there is no ceiling — the 1.45% applies to every dollar earned. Employers do not pay the additional 0.9% Medicare surtax; that applies only to employees earning above $200,000 (single) or $250,000 (married filing jointly). For a $75,000 salary, the employer's Medicare tax is $1,087.50 annually.
Federal Unemployment Tax (FUTA)
FUTA funds the federal unemployment insurance system. The gross rate is 6.0% on the first $7,000 of each employee's wages per year. However, employers in states with compliant unemployment programs receive a 5.4% credit, reducing the effective FUTA rate to just 0.6%. That means the maximum annual FUTA tax per employee is only $42. While the per-employee cost is small, it adds up: 50 employees equals $2,100 per year in FUTA alone.
State Unemployment Tax (SUTA)
Every state runs its own unemployment insurance program funded by employer contributions. SUTA rates and wage bases vary dramatically by state. New employers are typically assigned a standard rate (often 2–4%), which adjusts over time based on the employer's "experience rating" — essentially, how many former employees have filed unemployment claims. Employers with low turnover and few claims earn lower rates, while those with high claims pay more.
The wage base — the amount of each employee's wages subject to SUTA — also varies widely. Some states tax only the first $7,000 (matching the federal base), while others tax up to $56,700 or more. This means the total SUTA cost per employee can range from under $100 to over $1,500 depending on your state and experience rating.
Budgeting for Employer Payroll Taxes
A reliable rule of thumb is to budget 7.65%–10% of gross payroll for employer-side payroll taxes. The 7.65% covers the combined FICA obligation (6.2% Social Security + 1.45% Medicare), while the remaining percentage accounts for FUTA and SUTA. For a team of five employees each earning $75,000, expect to pay roughly $30,000–$38,000 per year in employer payroll taxes alone — before you account for benefits like health insurance, workers' compensation, or retirement contributions.
- Small teams (1–10 employees): Payroll taxes are a significant line item. Accurate calculation prevents cash flow surprises.
- Growing teams: Each new hire adds not just salary but 8–10% in additional tax obligations. Factor this into headcount planning.
- Multi-state employers: SUTA rates and wage bases differ by state. If you have remote employees in multiple states, you may owe SUTA in each state.
Payroll Tax Compliance Tips
- Deposit on time: Federal payroll tax deposits are due monthly or semi-weekly depending on your total tax liability. Late deposits trigger penalties starting at 2% and escalating to 15%.
- File quarterly returns: Form 941 (federal) is due by the last day of the month following each quarter. State UI reports have separate deadlines.
- Track the SS wage base: Stop withholding Social Security once an employee hits the annual cap. Overpayment creates refund obligations.
- Monitor your SUTA rate: Review your experience rating annually. A rising rate may signal a turnover problem that's also costing you in taxes.
- Automate when possible: Manual payroll tax calculations are error-prone. HR platforms like tinyteam automate calculations, generate filings, and alert you to deadlines.
Payroll taxes are one of those costs that every employer pays but few fully understand. Using an employer payroll tax calculator gives you clarity on the true cost of each hire and helps you budget accurately as your team grows. For automated payroll tax management, explore how tinyteam can simplify compliance for small and growing teams.
Frequently Asked Questions
What payroll taxes do employers pay?
Employers are responsible for matching Social Security tax (6.2% on wages up to $168,600), Medicare tax (1.45% on all wages), federal unemployment tax (FUTA, 0.6% on the first $7,000 per employee after credits), and state unemployment tax (SUTA, which varies by state and employer experience rating).
How much does the employer pay for Social Security and Medicare?
Employers match the employee's Social Security contribution at 6.2% on wages up to the annual cap ($168,600 in 2024) and Medicare at 1.45% on all wages. Together, the employer's FICA contribution is 7.65% of wages (up to the SS cap). For an employee earning $75,000, that is $5,737.50 per year.
What is the FUTA tax rate for employers?
The gross FUTA rate is 6.0% on the first $7,000 of each employee's wages. However, employers in states that comply with federal UI standards receive a 5.4% credit, bringing the effective FUTA rate to 0.6%. The maximum FUTA tax per employee is $42 per year ($7,000 × 0.6%).
What is SUTA and how does it vary by state?
SUTA (State Unemployment Tax Act) is the state-level unemployment insurance tax paid by employers. Rates vary widely — from under 1% to over 5% — depending on the state, the employer's industry, and their experience rating (claims history). New employers typically pay a standard rate that adjusts over time based on their unemployment claims record.
How much do employer payroll taxes add to the cost of an employee?
Employer payroll taxes typically add 7.65% to 10%+ on top of an employee's gross salary. For a $75,000 salary, expect $6,000–$8,000 in annual employer payroll taxes depending on your state. This does not include benefits like health insurance, 401(k) match, or workers' compensation insurance.
Is there a cap on employer Social Security tax?
Yes. In 2024, the Social Security wage base is $168,600. Both the employer and employee stop paying the 6.2% Social Security tax once the employee's wages exceed this threshold. Medicare tax has no wage cap — it applies to all wages. Employers do not pay the additional 0.9% Medicare tax; that is employee-only on wages above $200,000.
