2026 tax year · Official rules checked October 23, 2026

Estimating payroll taxes

For five employees each receiving $50,000 in covered annual wages, the illustrated employer FICA subtotal is $19,125: 5 × [($50,000 × 6.2%) + ($50,000 × 1.45%)]. This is the employer Social Security and Medicare subtotal, not the full payroll tax bill. FUTA, state and local charges remain separate until their rules and your rates are confirmed.

The headcount and wages are example inputs, not an actual company's records. This worksheet estimates the employer's own tax cost for ordinary covered employees, not take-home pay, self-employment tax or a tax deposit schedule.

Start with the employer share

For covered wages, the employer rates are 6.2% for Social Security and 1.45% for Medicare. Additional Medicare withholding is employee-only, without an employer match. Source: IRS official Social Security and Medicare tax-rate guide, checked October 23, 2026.

The 2026 Social Security wage cap is $184,500 per employee; Medicare has no wage cap. Source: SSA official 2026 taxable-earnings limit, checked October 23, 2026.

To enter different wage groups and download your calculated result, use the payroll tax calculator.

Use employee-level wages before a company total

For employee i, let Sᵢ be annual Social Security-taxable wages and Mᵢ annual Medicare-taxable wages. Employer FICA = sum of [min(Sᵢ, $184,500) × 0.062 + Mᵢ × 0.0145]. Apply the cap separately to each employee, then add the results. Do not apply a single wage cap to the entire company payroll.

These examples assume each person's Social Security and Medicare wages equal the stated annual wage, with ordinary coverage and no special exemptions or successor-employer adjustments. Payroll records can have different taxable wage bases; use those separate bases in your own worksheet.

All table amounts are our arithmetic from the sourced rates, cap and illustrative wage inputs. The higher-wage row shows why multiplying all company wages by 7.65% can overstate FICA: 7.65% = 6.2% + 1.45%, but the Social Security part stops at its individual cap.

Download employer tax formulas and confirmation worksheet (CSV)

Add FUTA only after checking the credit

FUTA starts at 6.0% on the first $7,000 of FUTA-taxable wages per employee. The maximum state unemployment credit is 5.4%, giving 0.6% after credit when all conditions are met. Credit-reduction rules and payment conditions can change the result. Source: IRS official FUTA rate, credit and filing guide, checked October 23, 2026.

Conditional illustration: if all five employees have at least $7,000 of FUTA-taxable wages and the employer qualifies for the full credit without a credit reduction, FUTA = 5 × $7,000 × (6.0% − 5.4%) = $210. Added to the $50,000 wage example, $19,125 + $210 = $19,335 is a conditional federal employer-tax subtotal. It still excludes state and local employer taxes. Do not use $210 as your confirmed FUTA amount without confirming the conditions.

For the next payroll, use the remaining wage base

Let C be current Social Security-taxable wages and Y the employee's year-to-date Social Security-taxable wages before this run. Current employer Social Security = min(C, max($184,500 − Y, 0)) × 0.062. Current employer Medicare = current Medicare-taxable wages × 0.0145.

The max operation floors the remaining base at zero. Those zeros are mathematical bounds, not substitutes for unknown wage inputs. A missing year-to-date record means the calculation is pending. For a midyear provider switch, reconcile imported wages before using a new system's remaining base.

Items to confirm before treating this as your budget

1. Tax year, employee coverage and each tax's taxable wage base, including benefit and deduction treatment.
2. Per-employee year-to-date taxable wages, especially after a midyear switch.
3. FUTA applicability, credit eligibility, state credit reductions and any special employer rules.
4. State unemployment rate from your own agency notice, its wage base and any additional assessments.
5. Applicable local employer taxes and employer-funded leave or disability contributions. No state is assumed here.

Record employee income-tax and employee FICA withholding separately. These are amounts withheld from employee pay, not another employer expense on top of gross wages. Paying or grossing up an employee's share requires a separate calculation.

Keep taxes separate from payroll software fees

Budget structure: gross wages + confirmed employer payroll taxes + software and administration fees + any separately valued internal work. Unknown tax lines stay pending rather than being entered as zero.

Use the payroll cost calculator on the homepage to turn your software quote into annual cash outlay and internal transition cost. Keep the employer-tax worksheet beside it; the homepage calculator does not calculate payroll taxes. This page supplies a planning method and conditional examples, not an individualized filing determination.