Professional services
Payroll Tax Calculator
Works payroll tax, where the employer's share is a cost on top of the wage.
Result
Not tax advice, and not a filing calculation. This estimates what to set aside using rates you supply. Brackets, thresholds, deductions, credits and state rules change every year and interact with the rest of your return in ways no single calculator models. Confirm anything that affects a payment or a filing with an accountant. State unemployment rates are experience rated, so a business with claims history pays substantially more than the default here. Workers compensation rates vary enormously by trade classification: office work is a fraction of a percent, roofing can exceed 20%. Both wage bases and rates change annually.
Get a Free Business AuditHow the calculation works
Social Security and Medicare are withheld from the employee and matched by the employer, with the Social Security element stopping at an annual wage base and Medicare continuing without limit plus an additional employee-only amount above a threshold. Federal and state unemployment taxes are employer-only, and state rules vary.
What moves the number
- Wages against the Social Security wage base.
- The employer match, which is a cost rather than a withholding.
- Federal and state unemployment, which are employer-only.
- State-specific taxes, which vary.
Where this one goes wrong
Withheld amounts are the employee's money held in trust and remitted, and the employer match is a genuine additional cost, so a payroll budget has to include the match rather than only the gross wages. The deposit obligation is the serious part: payroll taxes withheld and not remitted attract penalties that can reach individuals personally, and this is one of the few tax obligations where that happens. Treat the withheld amounts as untouchable.
Before you quote
- Budget the employer match as a cost above gross wages.
- Remit withheld amounts on the required deposit schedule.
- Check your state's own payroll taxes separately.
Where the rules come from
Questions
About this calculator
What does payroll tax cost the employer?
The match on Social Security and Medicare plus federal and state unemployment, on top of gross wages. The withheld employee share is not a cost but the match is, and a payroll budget built on gross wages alone understates it.
What happens if payroll taxes are not remitted?
Penalties follow and liability for withheld amounts can reach responsible individuals personally, which is unusual among tax obligations. Withheld money is held in trust rather than available to the business, and using it for cash flow is a serious mistake.
Do states have their own payroll taxes?
Many do, in addition to state unemployment insurance, and the rates and bases vary. A calculation built on federal rules alone is incomplete for most employers, so the state's own requirements need checking separately.
The formula
employer cost = FICA match + federal and state unemployment on their wage bases + workers compensation
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How to use this calculator
- Gross wages ($). Enter your own figure; the page starts at $60,000.
- Social Security rate, each side (%). Enter your own figure; the page starts at 6.2%.
- Medicare rate, each side (%). Enter your own figure; the page starts at 1.45%.
- Federal unemployment rate (%). Enter your own figure; the page starts at 0.6%.
- Federal unemployment wage base ($). Enter your own figure; the page starts at $7,000.
- State unemployment rate (%). Enter your own figure; the page starts at 2.7%.
The result updates as you type, so you can try a figure, see what it does to employer payroll cost, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Gross wages | $60,000 |
| Social Security rate, each side | 6.2% |
| Medicare rate, each side | 1.45% |
| Federal unemployment rate | 0.6% |
| Federal unemployment wage base | $7,000 |
| State unemployment rate | 2.7% |
| State unemployment wage base | $12,000 |
| Workers compensation rate | 2.5% |
What comes out
| Result | Value |
|---|---|
| Employer payroll cost main result | $6,456 |
| Withheld from the employee | $4,590 |
| True cost of the employee | $66,456 |
| Burden on top of wages | 10.76% |
| Employee take home before income tax | $55,410 |
Employing somebody at $60,000 actually costs $66,456, because employer payroll taxes add $6,456, a burden of 10.76% on top of the wage.
How sensitive the answer is
Holding everything else steady and changing only gross wages, this is what happens to employer payroll cost. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Gross wages ($) | Employer payroll cost |
|---|---|
| $30,000 | $3,411 |
| $45,000 | $4,934 |
| $60,000 example above | $6,456 |
| $90,000 | $9,501 |
| $120,000 | $12,546 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Gross wages ($)
- A money amount, starting at $60,000.
- Social Security rate, each side (%)
- A percentage, between 0 and 12, starting at 6.2%.
- Medicare rate, each side (%)
- A percentage, between 0 and 5, starting at 1.45%.
- Federal unemployment rate (%)
- A percentage, between 0 and 6, starting at 0.6%.
- Federal unemployment wage base ($)
- A money amount, starting at $7,000.
- State unemployment rate (%)
- A percentage, between 0 and 15, starting at 2.7%.
- State unemployment wage base ($)
- A money amount, starting at $12,000.
- Workers compensation rate (%)
- A percentage, between 0 and 25, starting at 2.5%.
What the results tell you
| Result | What it is |
|---|---|
| Employer payroll cost | The headline result. A money figure. |
| Withheld from the employee | A money figure. |
| True cost of the employee | A money figure. |
| Burden on top of wages | A percentage. |
| Employee take home before income tax | A money figure. |
Keep going
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