Employer payroll taxes percentage: what you add on top of wages

The employer payroll taxes percentage on wages you pay

The IRS is the Internal Revenue Service, the federal tax agency. Publication 15 (Circular E) is the IRS Employer’s Tax Guide. For 2026, that book sets the employer rates below. How to pay employees covers the amount you take out of the check. This page is the amount that stays off the check.

Social Security tax is 6.2 percent for you and 6.2 percent for the employee. For 2026, the Social Security wage base is $184,500. You stop the employer 6.2 percent when that employee’s wages for the year reach $184,500.

Medicare tax is 1.45 percent for you and 1.45 percent for the employee. Medicare has no wage cap. You also withhold Additional Medicare Tax, an extra 0.9 percent, on wages you pay that employee above $200,000 in the year. That extra 0.9 percent is the employee’s. You do not match it.

FUTA is the federal unemployment tax. For 2026, Publication 15 sets the FUTA rate at 6.0 percent of the first $7,000 you pay each employee. The credit for state unemployment tax may be as much as 5.4 percent of those wages. If you get that full credit, the FUTA rate after the credit is 0.6 percent. You get the full credit when you paid the state tax in full, on time, and on the same wages. The state also has to sit outside the credit-reduction list. A credit reduction state has not repaid money it borrowed from the federal government to pay unemployment benefits. The U.S. Department of Labor names those states. The Instructions for Form 940 are where you figure the credit. Form 940 is the annual federal unemployment tax return. Topic 759 states the same 6.0 percent rate, the $7,000 wage base, and the 0.6 percent rate after the full credit.

Social Security

6.2 percent, up to $184,500

Medicare

1.45 percent, no wage cap

FUTA after the full credit

0.6 percent, up to $7,000

State unemployment

The rate on your notice

Add the three federal rates when the wages are still under both caps and you get the full FUTA credit. 6.2 percent plus 1.45 percent plus 0.6 percent is 8.25 percent. That 8.25 percent is the sum of those three rates. State unemployment tax sits on top of it.

Most employers owe FUTA in 2026 under one of two tests. One test is $1,500 of wages in any quarter of 2025 or 2026. The other is one employee for part of a day in 20 different weeks in either year. Household work and farm work use other tests in Publication 15. Only the employer pays FUTA. It stays off the paycheck.

Calculator employer payroll taxes on wages you choose

Use one paycheck. This sample uses $2,000 of gross wages. Gross pay is wages before taxes. The $2,000 is still under the $184,500 Social Security cap and under the $7,000 FUTA cap. The full FUTA credit applies. Swap in your own wages at the end.

Employer Social Security is 6.2 percent of $2,000. That is $124. Employer Medicare is 1.45 percent of $2,000. That is $29. FUTA after the full credit is 0.6 percent of $2,000. That is $12. Add them. $124 plus $29 plus $12 is $165. That is 8.25 percent of the $2,000. State unemployment tax is still missing from the $165.

The caps change the next check. Say this employee has already been paid $6,500 this year, and this check is another $2,000. Only $500 is still inside the $7,000 FUTA wage base. FUTA on this check is 0.6 percent of $500, which is $3, if you still have the full credit. Social Security and Medicare still use the full $2,000 if the employee is under $184,500 for the year.

Once that employee’s wages for the year reach $184,500, employer Social Security on the next dollar is zero. Medicare stays at 1.45 percent. The extra 0.9 percent Additional Medicare Tax, above $200,000, still comes out of the employee’s wages only.

State unemployment tax changes the percent

SUTA, or SUI, is the state unemployment tax. The rate and the wage base change by state. Use the rate on the notice that state sends you. The lines below are eight states. They are not a national rate, and they are not a full list.

Washington does not take state income tax from paychecks. The Employment Security Department sets the 2026 taxable wage base at $78,200. A new employer pays 115 percent of the average rate for its industry. Federal law sets a 1 percent floor. Paid Family and Medical Leave and WA Cares are a second quarterly report. They are a separate program from that unemployment tax.

Texas does not take state income tax from paychecks. The unemployment wage base is the first $9,000 paid to a person in a calendar year. The initial contribution rate is the greater of the major-group rate minus 0.1 percent, or 2.6 percent, until an experience rate starts. A separate employment and training investment assessment is 0.1 percent of wages. The employer may not deduct the unemployment contribution from wages.

Florida does not take state income tax from paychecks. Reemployment tax is Florida’s name for the employer tax that funds unemployment benefits. The initial rate is 2.7 percent of the first $7,000 paid to each employee in the calendar year. Workers do not pay it. Employers must not take it from paychecks.

Alaska does not take state income tax from paychecks. The 2026 taxable wage base is $54,200. Deduct an employee unemployment share of 0.50 percent from wages. A new employer’s maximum employer share is 1.00 percent. The combined maximum is 1.50 percent. Read another state’s page before you deduct an employee share there.

Nevada does not take state income tax from paychecks. The new-employer unemployment rate is 2.95 percent of taxable wages. The 2026 wage base is $43,700. Shops that are not at the 5.4 percent experience rate also pay the Career Enhancement Program at 0.05 percent. A regular shop that owes unemployment tax also owes the Modified Business Tax. That page prints a general-business rate of 1.17 percent, and the first $50,000 of wages stays non-taxable. The 1.17 percent is a separate employer tax.

Hawaii does take state income tax from paychecks. The 2026 unemployment tax base is $64,500. The new-employer rate is 2.4 percent. The Employment and Training assessment is 0.1 percent. Temporary disability insurance is a separate coverage. It uses a different rule from that unemployment rate.

Oregon does take state income tax from paychecks. The 2026 unemployment wage base is the first $56,700. New shops with less than 12 months of reported payroll pay a 2.4 percent base rate. A special payroll tax offset is 0.135 percent in each 2026 quarter. Paid Leave Oregon is separate. The 2026 contribution rate is 1 percent of subject wages up to $184,500. Employees pay 60 percent of that rate. Shops that average 25 or more employees pay the other 40 percent. A shop under 25 still withholds the employee share. That smaller shop owes the employer share for eight quarters if it takes an assistance grant.

Massachusetts does take state income tax from paychecks. For 2026, the new-employer unemployment rate is 2.42 percent for shops registered less than three years. New construction uses 6.08 percent. The wage base is the first $15,000 of each employee’s wages. The Employer Medical Assistance Contribution uses that same $15,000 base. A new shop is exempt from that contribution for the first three years.

What determines an employer’s payroll tax deposit schedule

A deposit is the payment of the taxes. Your payday does not pick the deposit day. Publication 15 uses two schedules for Social Security, Medicare, and withheld federal income tax. A monthly schedule depositor sends the month’s taxes by the 15th day of the next month. A semiweekly schedule depositor follows the payday. Wages paid on Wednesday, Thursday, or Friday are due the next Wednesday. Wages paid on Saturday, Sunday, Monday, or Tuesday are due the next Friday.

The lookback period is the four quarters the IRS uses to pick that schedule. For a 2026 Form 941 filer, the lookback period runs from July 1, 2024, through June 30, 2025. Form 941 is the quarterly federal payroll tax return. Add the tax you reported on Form 941, line 12, for those four quarters.

If those taxes were $50,000 or less, you are a monthly schedule depositor. If they were more than $50,000, you are a semiweekly schedule depositor. A new Form 941 filer counts the quarters before the business started as zero. You are a monthly schedule depositor for the first calendar year. If the IRS has told you in writing to file Form 944, the annual employment tax return, Publication 15 uses a different lookback. Read that section before you copy these dates.

Two dollar tests can change the plan. If you accumulate $100,000 or more of these taxes on any day in a deposit period, you deposit by the next business day. A monthly depositor then becomes a semiweekly depositor for the rest of that year and the next year.

The other test is $2,500. Look at Form 941, line 12, for this quarter and the prior quarter. If either line is under $2,500, you may pay with a timely Form 941. That choice also requires that you stayed under the $100,000 next-day rule this quarter. If you are not sure this quarter will stay under $2,500, check the prior quarter. If that prior quarter was $2,500 or more, deposit on your monthly or semiweekly schedule.

FUTA uses its own quarterly rule. Figure it each quarter. Multiply the quarter’s FUTA wages by 0.6 percent, then adjust that amount if you do not get the full credit. If the quarter’s FUTA tax, including any amount carried forward, is over $500, deposit it by the last day of the next month. If it is $500 or less, carry it to the next quarter. If the fourth quarter, plus any amount still carried forward, is over $500, deposit it by January 31, the due date of Form 940. If it is $500 or less, you may pay it with Form 940 by January 31. If the due date is a Saturday, Sunday, or legal holiday, the next business day is on time. October 31, 2026, falls on a Saturday. A FUTA deposit due that day is on time on Monday, November 2, 2026. November 2 is not on Publication 15’s 2026 legal-holiday list.

You pay these deposits by electronic funds transfer. EFTPS is the Electronic Federal Tax Payment System. It is a free system from the U.S. Department of the Treasury. The EFTPS page says a new enrollment can take up to five business days. IRS Direct Pay and your IRS business tax account are also free. A bank, a tax pro, or a payroll service may charge a fee to pay for you.

Hiring your first employee is the list of accounts to open before the first deposit. A payroll service can multiply the rates on this page. Publication 15 says you stay responsible if that service misses a deposit or a return. The methodology page grades how much of the state work the software takes off your desk. Gusto is one plain link. Patriot is the other service on this site.