Employer payroll taxes are the taxes a business pays on top of wages, separate from what it withholds from employees’ paychecks. The main ones are the employer share of Social Security and Medicare, federal unemployment tax and state unemployment tax.
| Tax | Employer rate | Wages it applies to |
|---|---|---|
| Social Security | 6.2% | Up to $184,500 for each employee |
| Medicare | 1.45% | All wages |
| Additional Medicare | None (employee only, 0.9%) | Withheld above $200,000 |
| FUTA | 6.0%, usually 0.6% after the state credit | First $7,000 for each employee |
| State unemployment | Set by the state, varies by employer | State wage base |
Withheld employee taxes are not an employer expense, but the employer is responsible for depositing them on time with its own share.
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A warehouse hires a lead at $25 an hour for 2,080 hours, or $52,000 a year. The owner wants to know the employer tax cost on top of wages.
Social Security: 6.2% x $52,000 = $3,224. Medicare: 1.45% x $52,000 = $754. FUTA after the full state credit: 0.6% x $7,000 = $42. In this example the state unemployment rate is 2.7% on a $9,000 state wage base, or $243; real state rates and bases differ.
The total employer tax is $3,224 + $754 + $42 + $243 = $4,263, about 8.2% of wages. Benefits and workers’ compensation insurance come on top of that, which is why the true cost of a hire is well above the hourly rate.
Two of the federal employer taxes stop once an employee’s wages reach a limit. FUTA applies only to the first $7,000 of each employee’s wages, so most of the FUTA cost lands in the first months of the year. Social Security stops at the wage base, $184,500 for 2026, so for high earners the employer share ends partway through the year. Medicare has no cap, so it runs all year.
That pattern matters for monthly budgets and for seasonal hiring. A business that hires a large seasonal crew pays FUTA on each new worker’s first $7,000 of wages, even if the crew works only a few months.
A retail chain has a store manager on a $200,000 salary. The employer’s Social Security share is 6.2% of the first $184,500, or $11,439 for the year, and then stops. Medicare continues at 1.45% on every dollar, $2,900 for the year.
The same chain hires an hourly associate at $700 a week in January. After 10 weeks the associate has earned $7,000, so the chain’s FUTA cost for that employee, $42 after the full state credit, is finished by mid-March. State unemployment tax follows its own wage base, which can be higher or lower.
The employer share of Social Security (6.2% up to the wage base) and Medicare (1.45%), federal unemployment tax, and state unemployment tax, plus any other state or local employer taxes.
$184,500. Wages above that amount for an employee are not subject to the 6.2% Social Security tax.
No. The 0.9% additional Medicare tax is paid by the employee. The employer withholds it on wages over $200,000 but does not match it.
6.0% of the first $7,000 of wages. With the full state credit of 5.4%, it is usually 0.6%, or $42 a year for each employee who earns at least $7,000.
FUTA and most state unemployment taxes apply only to each employee’s first wages of the year, up to a wage base, so most of that cost lands in the first months.
Yes. The employer share of Social Security and Medicare and unemployment taxes apply to employees’ wages regardless of hours, within each tax’s wage base.
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