Employer Payroll Cost Calculator 2026
The true cost of an employee in 2026: employer Social Security (to $184,500) and Medicare, FUTA, state unemployment, health insurance, 401(k) match and other benefits — total cost, burden rate, hourly cost and the equivalent contractor rate.
| Social Security (employer 6.2%) | — |
|---|---|
| Medicare (employer 1.45%) | — |
| FUTA (0.6% of first $7,000) | — |
| State unemployment | — |
| Mandatory payroll taxes | — |
| Benefits | — |
| Total cost of employment | — |
| Burden rate | — |
| True hourly cost | — |
| Equivalent contractor rate | — |
In short
An employee costs more than salary: employers pay 6.2% Social Security on wages up to $184,500 in 2026, 1.45% Medicare on all wages, 0.6% FUTA on the first $7,000 ($42) and state unemployment on each state's wage base, plus health insurance, retirement match, workers' compensation and paid leave. Payroll taxes alone add about 8–10%; the all-in burden is typically 1.25–1.4 times salary.
Who this is for: US small-business owners and hiring managers budgeting a new hire or comparing an employee with a contractor.
What an employee really costs in 2026
- Mandatory employer taxes: Social Security 6.2% (up to $184,500 of wages), Medicare 1.45% (no cap), FUTA 0.6% of the first $7,000 ($42), and state unemployment on each state's wage base at your experience rate.
- Benefits: employer health premiums average roughly $7,000–8,000 a year for single coverage and over $20,000 for family plans; a 3–4% 401(k) match, workers' compensation (0.5–5% depending on the job) and paid leave add more.
- Burden rate: taxes alone add about 8–10%; with benefits most employers land at 1.25–1.4× salary.
- Employee vs contractor: a contractor's higher hourly rate covers the 7.65% employer FICA you are not paying plus their own benefits — compare the true hourly cost, not the base rate.
- Deductible: wages, payroll taxes and benefits are all deductible business expenses; the health premiums are also tax-free to the employee.
See also: 1099 vs W-2 Calculator, US Paycheck Calculator — Take-Home Pay 2026.
Assumptions
- Employer FICA 6.2% to $184,500 + 1.45%; FUTA 0.6% of the first $7,000; SUTA at the rate and wage base entered.
- Benefits = health × 12 + match % × salary + other.
- Hourly cost = total ÷ hours entered; contractor-equivalent assumes identical total cost.
Worked example
Social Security $4,650 + Medicare $1,088 + FUTA $42 + SUTA $270 = $6,050 of payroll taxes (8.07%). Benefits: $7,200 health + $2,250 match + $2,500 = $11,950. Total cost $93,000 — a 24.0% burden — or $44.71 an hour against a $36.06 base rate.
Frequently asked questions
What percentage does an employer pay in payroll taxes?
7.65% FICA (6.2% + 1.45%) plus 0.6% FUTA on the first $7,000 and state unemployment — typically 8–10% of salary in total for mid-level pay.
Is the Social Security wage base $184,500 in 2026?
Yes — the employer 6.2% stops at $184,500 of wages per employee; Medicare 1.45% continues on all wages.
What is a typical burden rate?
1.25 to 1.4 times salary once health insurance, retirement match, workers' comp and paid leave are included.
Do I pay FUTA on every employee?
Yes, on the first $7,000 of each employee's wages — $42 each at the net 0.6% rate, more if your state has a credit reduction.
What is a FUTA credit reduction state?
A state that has not repaid federal unemployment loans; employers there pay a higher net FUTA rate (0.9% or more instead of 0.6%).
Are bonuses subject to employer payroll tax?
Yes — bonuses are wages for FICA and unemployment tax purposes.
Related calculators
See all United States calculators → · All free online calculators
Found an error? Report it — tell us the inputs, the result you got, what you expected and the rule or source. Confirmed corrections are published within a week.
Ready to build your next digital solution?
Send the brief and you get a scoped response with approach, milestones and a fixed price range. Not a sales call.
A 30-minute call with the engineer who would run your project
Within 2 business daysA written scope: approach, module breakdown, milestones, fixed price range
Within 5 business daysYou decide. No retainer, no obligation, and the scope document is yours to keep either way
Your timelineSend your brief
Three fields to start. Add project details if you have them.