Payroll Calculator - Total Employer Cost (2026)

At 40 hours and 52 weeks, gross is $52,000. Employer taxes are $3,224 Social Security 6.2%, $754 Medicare 1.45%, $42 FUTA 0.6% on $7,000, $189 state 2.7% on $7,000 and $520 workers comp 1%, totaling $4,729 in taxes, so true cost is $56,729 or $27.27 per hour before any health benefits.

Multiply 7.65% on the first $176,100 per employee: 6.2% Social Security and 1.45% Medicare. On $52,000 that is $3,224 and $754; on $180,000 it is $10,918 and $2,610, with Social Security capped at $10,918 and Medicare uncapped. Additional 0.9% Medicare applies to the employee only, not the employer.

The Social Security wage base is $176,100 per employee per year in 2026 per IRS Publication 15. Wages above $176,100 are exempt from 6.2% Social Security but still subject to 1.45% Medicare. The base is adjusted annually and applies separately to each employee.

Overtime is 1.5× the regular hourly rate and is fully subject to FICA and workers comp. At $25 base, 5 overtime hours weekly over 52 weeks adds $9,750 in gross ($37.50×5×52) and about $1,844 in extra employer taxes and comp, raising true cost from $56,729 to $68,323 for that one employee.

FUTA is 6.0% on the first $7,000 per employee, but most employers receive a 5.4% credit for timely state payments, leaving 0.6% or $42 on $7,000. Credit-reduction states can push the effective rate to 1.2% or $84, so the $42 is the common $7,000-base example with full credit.

On a $7,000 base the cost rises from $189 at 2.7% to $350 at 5%, an extra $161 per employee. On a $45,000 base at 5% it is $2,250, $2,061 more than the $189 example, so a high-base state with high rate can add thousands per head and must be in the bid.

This calculator does not include: (1) employee federal or state income tax withholding, which is employee-paid; (2) additional Medicare 0.9% on wages above $200,000, which is employee-only; or (3) payroll service fees. It assumes the 2026 $176,100 cap and the rates you entered for FUTA/SUI.

Adding $6,000 in health benefits to a $25 hourly 40-hour employee raises true cost from $56,729 ($27.27/hr) to $62,729 ($30.16/hr), an extra $2.89 per hour. On a $15 hourly employee the $6,000 is 19.2% of gross versus 4.8% on $60 hourly, so benefits weigh more on low-wage roles.

Yes, convert salary to an equivalent hourly: $60,000 salary over 2,080 hours is $28.85 base, then apply the same FICA, unemployment and comp logic. Be cautious with exempt status: salaried exempt employees do not receive overtime at 1.5×, while non-exempt salaried still do when they exceed 40 hours.

Generally yes, employer wages, the employer share of FICA, unemployment, workers comp and benefits are ordinary business expenses deductible in the year paid for cash-basis firms. The deduction is at the business marginal rate, so $56,729 at 22% saves about $12,480 in federal tax, but payroll taxes themselves are not refundable credits.