As an employer, you pay three main categories of payroll taxes on every employee's wages. These taxes are separate from what the employee owes — they come directly out of your budget.
FICA: Social Security and Medicare
Social Security: 6.2% on wages up to $168,600 (2024 wage base) Medicare: 1.45% on all wages (no cap) Additional Medicare: 0.9% on wages over $200,000 — but this is the employee's share, not the employer's
Employer FICA total: 7.65% on all wages up to $168,600, then 1.45% on wages above that.
At $100k salary: FICA = $7,650 At $200k salary: FICA = ($168,600 × 7.65%) + ($31,400 × 1.45%) = $12,898 + $455 = $13,353
FUTA: Federal Unemployment Tax
Rate: 6% on first $7,000 of wages, reduced to 0.6% effective for employers in states not in arrears to the federal unemployment fund (all but a few states)
Max per employee: $7,000 × 0.6% = $42/year
FUTA is a minor cost — $42/employee — but must be filed quarterly and annually.
SUTA: State Unemployment Tax
Each state sets its own wage base and rate: - California: 3.4% on first $7,000 (new employer rate) - New York: 3.4% on first $12,500 - Texas: 2.7% on first $9,000 - Florida: 2.7% on first $7,000
Rates change based on your "experience rating" — employers with low layoff history get lower rates over time.
Quick Reference: Employer Cost at Common Salaries
| Salary | FICA | FUTA | SUTA (avg 2.7%) | Total |
|---|---|---|---|---|
| $60,000 | $4,590 | $42 | $189 | $4,821 |
| $100,000 | $7,650 | $42 | $189 | $7,881 |
| $150,000 | $11,475 | $42 | $189 | $11,706 |
Calculate your total employee cost at the Employee Cost Calculator.