Payroll Calculator
When you hire someone, their pay is not the whole cost. You also pay payroll taxes and, often, insurance. Enter the yearly pay and the calculator adds up your real cost for one employee, per pay period and per year.
It is made for small business owners deciding on a hire or setting a budget. For the employee’s side, take-home pay, see the paycheck calculator.
Please note: Estimate only, based on 2026 federal figures. This is not tax, legal or financial advice. State rates and wage bases differ and change every year. Check with your state agency or a payroll professional.
How it works
Employers pay half of Social Security and Medicare. That is 6.2% of pay up to the $184,500 wage base for 2026, and 1.45% of all pay. The extra 0.9% Medicare tax on pay over $200,000 is paid by the employee only.
Federal unemployment tax (FUTA) is 6.0% of the first $7,000 of each worker’s pay. Most employers get a credit of up to 5.4% for paying state unemployment tax on time, so the usual rate is 0.6%, or $42 per employee per year.
State unemployment tax (SUTA) has its own rate and wage base for each state. The defaults in the boxes are the Texas figures for a new employer, 2.7% on the first $9,000. Change them to your own state’s notice. Workers’ compensation is priced by job type and is often a percent of pay. If your employee pays for health insurance before tax, it lowers the pay Social Security and Medicare apply to.
Add your own cost of benefits, such as your share of health insurance, to see the true total. The “burden” figure shows how much extra you pay beyond wages, as a percent of wages.
employer Social Security = 6.2% of pay up to $184,500
employer Medicare = 1.45% of pay
FUTA = 0.6% of first $7,000
SUTA = your rate × first (your state’s wage base)
total cost = pay + all of the above + workers’ comp + benefitsWorked example: One employee at $60,000 a year
Employer Social Security is $3,720 and Medicare is $870. FUTA is $42. SUTA at 2.7% on $9,000 is $243. Together that is $4,875 of employer taxes.
The total cost is $64,875 a year, which is $2,495.19 each pay period when paid every two weeks. The extra cost on top of wages is about 8.13%.
Add workers’ comp at 1.5% ($900) and $6,000 of health benefits, and the cost rises to $71,775, which is about 19.6% above wages.
Frequently asked questions
Is this the same as the employee’s take-home pay?
No. This is what the business pays. The employee’s take-home is lower than their gross pay, because their own taxes are taken out. Use the paycheck calculator for that.
What SUTA rate should I use?
The rate on the notice from your state’s workforce agency. New employers get a standard rate, which is different in every state. The wage base is also set by the state.
Do these figures apply to contractors?
No. Independent contractors are not employees, so you do not pay these employer taxes for them. Be sure a worker is correctly classified, because mistakes can be costly.
Are there other employer costs?
Yes. Some states charge extra payroll taxes or paid-leave premiums, and there are costs for payroll software, insurance and time. This tool covers the main federal and state items.
Can I use it for many employees?
Yes. Set the number of employees. It assumes they are all paid the same. For a mix of pay levels, run it once for each pay level and add the results.
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Sources
Content last reviewed 2026-10-13.