Every US employer pays three categories of payroll taxes on top of the employee's wage. These are mandatory, separate from income tax withholding, and paid entirely by the employer (not deducted from the employee's paycheck).
FICA — Federal Insurance Contributions Act
FICA funds Social Security and Medicare.
| Tax | Employer rate | Wage base |
|---|---|---|
| Social Security | 6.2% | First $168,600 (2024) |
| Medicare | 1.45% | All wages |
| Total FICA | 7.65% |
For a $120,000 salary: 7.65% × $120,000 = $9,180/year in employer FICA.
Note: employees also pay 7.65% FICA (matched by employer). For a $120k employee, total FICA (both sides) = $18,360/year.
FUTA — Federal Unemployment Tax Act
FUTA funds federal unemployment insurance. - Statutory rate: 6.0% on first $7,000 of each employee's wages - After state unemployment tax credit: 0.6% effective rate - Maximum per employee: $7,000 × 0.6% = $42/year
Most employers pay the effective 0.6% rate. Credit is lost if you're delinquent on state unemployment taxes.
SUTA — State Unemployment Tax Act
SUTA is the state-level unemployment tax. Rates vary widely:
| State | New employer rate | Wage base |
|---|---|---|
| California | 3.4% | $7,000 |
| New York | 3.6% | $12,500 |
| Texas | 2.7% | $9,000 |
| Florida | 2.7% | $7,000 |
| Washington | 1.0–5.7% | $67,600 |
Rates change with your "experience rating" — employers with fewer unemployment claims get lower rates after 3+ years in business.
Total payroll tax example
Employee in California with $120,000 salary, new employer: - FICA: $9,180 - FUTA: $42 - SUTA: $7,000 × 3.4% = $238 - Total employer payroll taxes: $9,460 (7.9% of salary)
Use the Payroll Cost Calculator to calculate total payroll taxes and employer cost for any salary and state.