Payroll Tax Calculator
Enter the salary to see what an employee truly costs — salary is only the start.
Runs entirely in your browser — your numbers never leave this page.
How it works
A $65,000 salary costs roughly $80,000+. The extras employers pay:
- FICA (7.65%): 6.2% Social Security (on wages up to $184,500 in 2026) + 1.45% Medicare (no cap). You match what the employee pays.
- FUTA (0.6%): federal unemployment on the first $7,000 — the 5.4% state credit makes the effective rate 0.6%.
- SUTA (2–4% typical): state unemployment — rate depends on your state and layoff history; new employers pay a standard new-employer rate.
- Workers' comp: priced by risk class — ~0.5% for office work, 5%+ for roofing/construction. Misclassifying workers here is expensive.
- Benefits: health insurance (~$7k–15k/employee/year), 401(k) match, paid leave — often the biggest "hidden" line.
- Pricing work: bid jobs on the true hourly cost (total ÷ 2,080), not the wage — that gap is where margins die.
Frequently asked questions
How much does an employee really cost?
Typically 1.25–1.4x salary. A $65,000 employee costs ~$80,000–90,000 with taxes, comp, and benefits.
What is FICA for employers?
You match the employee's 6.2% Social Security (up to the $184,500 wage base for 2026) and 1.45% Medicare — 7.65% total.
What is FUTA?
Federal unemployment tax: 6% on the first $7,000 of wages, minus a 5.4% credit for paying state unemployment — effective 0.6%, or $42/employee/year.
What is SUTA?
State unemployment insurance — rates and wage bases vary by state (often 2–4% on the first $10k–15k). Your rate rises with layoff claims.
How much is workers comp?
Priced per $100 of payroll by risk class: ~$0.50 for office, $2–4 for trades, $5+ for roofing. It's a major cost in construction.
Do I pay Social Security on all wages?
Up to the annual wage base ($184,500 for 2026) — wages above that skip the 6.2%, but Medicare's 1.45% has no cap.
What about part-time employees?
Same tax rates apply — FICA, FUTA, SUTA, and comp are all wage-based, not hour-based. Benefits may differ.
Contractor vs employee cost?
Contractors skip payroll taxes and benefits but cost more hourly and offer less control. Misclassifying employees as contractors brings IRS penalties.
How do I price jobs with labor cost?
Use true hourly cost (total annual cost ÷ 2,080 hours), then add overhead and profit margin on top.
Are payroll taxes deductible?
Yes — the employer share of payroll taxes is a deductible business expense.