As an employer in the US, you pay payroll taxes on top of every employee's gross salary. Here is what you owe and how it is calculated.
Federal employer payroll taxes (2024)
Social Security (OASDI) — 6.2%
Rate: 6.2% on wages up to $168,600 (2024 wage base — confirm current year) The employee also pays 6.2%; total FICA = 12.4% split equally.
Medicare — 1.45%
Rate: 1.45% on all wages, no cap. The employee also pays 1.45% (+ 0.9% additional Medicare on wages above $200k for the employee only).
FUTA (Federal Unemployment Tax) — 0.6%
Rate: 6.0% on first $7,000 of each employee's wages. Most employers receive a 5.4% credit for paying state unemployment (SUTA), reducing the effective rate to 0.6%.
Example calculation: $80,000 salary
| Tax | Calculation | Employer cost |
|---|---|---|
| Social Security | $80,000 × 6.2% | $4,960 |
| Medicare | $80,000 × 1.45% | $1,160 |
| FUTA | $7,000 × 0.6% | $42 |
| Total | $6,162 |
Total employment cost = $80,000 + $6,162 = $86,162
SUTA rates vary by state (0.1%–10%+) and prior layoff history. Always model your specific state rate separately.
Use the payroll tax calculator to compute employer costs for any salary.