Payroll Tax Estimator (Flat Rate)

Employer-side taxes (2026): Social Security 6.2% (up to $184,500 wage base), Medicare 1.45%, FUTA 0.6% (federal unemployment), state unemployment (varies 0.5-6%). Total ~8-15% on top of salary. Employees pay matching SS/Medicare separately.

Budget 1.25x to 1.4x the base salary as the fully loaded cost. The overhead breaks down roughly as follows: FICA taxes add 7.65% (6.2% Social Security plus 1.45% Medicare), employer-sponsored health insurance runs $8,000-$15,000 per year depending on coverage tier, a 401(k) match of 3-6% adds another layer, and workers compensation insurance typically adds 1-3% depending on the job category. Factor in PTO accrual, equipment, software licenses, and shared office overhead and the multiplier reaches 1.4x for knowledge workers in high-cost markets.

Yes - employer-paid payroll taxes are deductible business expenses. Employee-paid payroll taxes are NOT deductible (they reduce gross-to-net pay but not employer taxable income). 1099 contractors pay both halves themselves (15.3% self-employment tax).

FICA (Federal Insurance Contributions Act) funds Social Security and Medicare. The total is 15.3% of wages: the employer withholds and remits 7.65% from the employee's pay, and the employer pays another 7.65% out of its own pocket. In real terms, FICA makes every employee cost the employer at least 7.65% more than their gross salary.

FUTA (Federal Unemployment Tax Act) funds federal unemployment benefits. The gross rate is 6%, but most employers get a 5.4% credit for their state unemployment insurance (SUTA) contributions, leaving a net rate of 0.6%. It applies only to the first $7,000 of each employee's annual wages, so the maximum is $42 per employee per year.

The employee's marginal bracket rate based on their salary and filing status. Federal brackets run from 10% to 37%. For a quick estimate you can use the rate of their most likely bracket, but remember that the real tax is computed progressively across each bracket, not as a flat rate on total salary.

It is an IRS (Internal Revenue Service) penalty that holds owners, officers, and payroll-responsible employees personally liable when withheld taxes are not deposited. Unlike most business debts, this penalty pierces the protection of the corporate entity and can reach personal assets. Depositing payroll taxes by the applicable deadline is a top-priority legal obligation.