Employer payroll taxes (2026)

What does an employer pay on top of your salary? Employers pay a matching 7.65% FICA tax on your wages (6.2% Social Security up to $184,500 and 1.45% Medicare), plus federal unemployment tax of up to $42 per employee and state unemployment tax. None of it comes out of your paycheck.

Costs beyond your salary

The salary on your offer letter is not what you cost your employer. On top of your wages, employers owe payroll taxes in your name — and none of them is deducted from your paycheck. Knowing them explains why an employer's “total compensation” figure is higher than your gross pay, and why hiring decisions do not follow the salary alone.

Employer FICA: the match

Social Security and Medicare are split between you and your employer. You pay 6.2% Social Security (on wages up to $184,500 in 2026) and 1.5% Medicare; your employer pays the same amounts on top. That is 7.65% for most workers, appearing on stubs as FICA ER. The Additional Medicare Tax of 0.9% on wages above $200,000 is paid by the employee only.

The employee halves are covered in what OASDI is and what MED EE is.

FUTA and state unemployment tax

The Federal Unemployment Tax Act (FUTA) rate is 6.0% on the first $7,000 of each employee's wages, but employers who pay their state unemployment tax on time get a credit of up to 5.4%, so the effective rate is usually 0.6% — a maximum of $42 per employee per year. In states with outstanding federal unemployment loans the credit can be reduced.

State unemployment tax (SUTA or SUI) is separate: each state sets its own taxable wage base and a rate that depends on the employer's history of layoffs, so it varies widely and is not shown here. Employees generally do not pay any of it.

What mandatory federal payroll taxes add

Salary	Employer FICA	FUTA (max)	Federal payroll taxes	As a share of salary
$40,000	$3,060	$42	$3,102	7.8%
$60,000	$4,590	$42	$4,632	7.7%
$100,000	$7,650	$42	$7,692	7.7%
$200,000	$14,339	$42	$14,381	7.2%

Salary $60,000 (92.8%)
Employer FICA $4,590 (7.1%)
FUTA $42 (0.1%)

What an employer pays in mandatory federal payroll taxes on a $60,000 salary (before state unemployment tax and benefits)

Above the Social Security wage base the percentage falls, because only the 1.45% Medicare tax continues to apply to higher wages.

Other employer costs

State unemployment tax — rate and wage base set by each state.
Workers' compensation insurance — priced by job type and claims history.
Benefits — employer share of health insurance, 401(k) match, paid time off.
State programs — some states charge employers for paid family leave, disability insurance or training funds. See state payroll programs.

Why this matters to you

Raises cost more than they look. A $5,000 raise costs the employer roughly $5,000 plus the 7.65% match. See what a raise really pays.
Self-employed workers pay both halves. That 15.3% (12.4% Social Security + 2.9% Medicare) is self-employment tax, partly deductible.
Contractor vs employee. A contractor rate that looks higher than an employee's salary has to cover the payroll taxes and benefits an employer would otherwise pay.

To see only what leaves your own paycheck, use the paycheck calculator. This is general information, not tax or legal advice.

Frequently asked questions

What payroll taxes does an employer pay?

Employers pay a matching 7.65% FICA (6.2% Social Security up to the wage base and 1.45% Medicare), federal unemployment tax (FUTA), and state unemployment tax. Many also pay workers’ compensation insurance and some state-specific payroll taxes.

Does my employer pay half of my Social Security and Medicare tax?

Yes. You pay 6.2% Social Security and 1.45% Medicare from your paycheck, and your employer pays the same amounts on top of your wages. The extra 0.9% Additional Medicare Tax is paid by the employee only.

Do employees pay unemployment tax?

In almost every state, no. FUTA and state unemployment tax (SUTA) are paid by the employer. A few states collect small employee contributions, often for related programs.

How much does an employee really cost an employer?

Beyond salary, the mandatory federal payroll taxes alone add roughly 7.65% plus a small unemployment tax, before benefits, insurance and state taxes. Total cost is commonly well above the salary.

Is employer FICA shown on my pay stub?

Sometimes, as an informational line labelled FICA ER or Employer taxes. It does not reduce your net pay.