Payroll Tax Calculator
Calculate your employer payroll tax obligations and the true cost of each employee.
Business Details
3 employee(s) detected
Total Payroll
$155,000
Employer Taxes
$12,699
Tax Rate
8.2%
Monthly Cost
$13,975
Tax Breakdown
Per Employee Detail
| # | Salary | SS | Medicare | SUTA | Total Tax |
|---|---|---|---|---|---|
| 1 | $55,000 | $3,410 | $798 | $238 | $4,488 |
| 2 | $55,000 | $3,410 | $798 | $238 | $4,488 |
| 3 | $45,000 | $2,790 | $653 | $238 | $3,723 |
Disclaimer
SUTA rates shown are new employer rates; your actual rate depends on experience. Workers' comp rates vary by industry. Consult a payroll provider for exact figures.
Employer Payroll Tax Obligations
| Tax | Rate | Wage Base (2026) |
|---|---|---|
| Social Security (OASDI) | 6.2% | $176,100 |
| Medicare | 1.45% | No limit |
| FUTA (Federal Unemployment) | 0.6% (after credit) | $7,000 |
| SUTA (State Unemployment) | 0.5-5.4% | Varies by state |
| Workers' Compensation | 0.5-3%+ | Varies by industry |
The True Cost of an Employee
An employee's salary is just the starting point. Add employer FICA (7.65%), unemployment taxes, workers' comp insurance, health insurance ($7,000-$16,000/year for employer share), retirement contributions, and PTO. A common rule of thumb: the true cost of an employee is 1.25x to 1.4x their salary, or even higher with generous benefits.
Employee vs Independent Contractor
Employers don't pay payroll taxes on 1099 independent contractors — but misclassification carries heavy penalties. The IRS and state agencies actively audit worker classification. Key factors include behavioral control, financial control, and the type of relationship. When in doubt, classify as an employee.
IRS — Employment Taxes→Frequently Asked Questions
When are payroll taxes due?
Federal payroll taxes are due on a semi-weekly or monthly schedule depending on your total tax liability. Form 941 is filed quarterly. FUTA (Form 940) is filed annually. Late deposits incur penalties of 2-15% depending on how late the payment is.
Do I need payroll software?
For most businesses with employees, yes. Services like Gusto, ADP, or QuickBooks Payroll handle tax calculations, filings, and direct deposits. They cost $40-$80/month plus $6-12 per employee. The time saved and penalty avoidance easily justifies the cost.
Related: Business Entity Comparator and Startup Cost Calculator.