Employer payroll taxes
Employer payroll taxes and employee cost in the US
For a W-2 employee, employer cost usually starts with gross wages and adds employer-paid payroll taxes, unemployment taxes, workers compensation, benefits, and payroll administration.
Federal components
Employer FICA is 7.65% of covered wages: 6.2% Social Security on the first $184,500 of 2026 earnings per employee, plus 1.45% Medicare with no wage cap (IRS Topic 751). FUTA is 6.0% on the first $7,000 of wages per employee, and drops to an effective 0.6% when the employer qualifies for the full 5.4% state unemployment tax credit (IRS Topic 759).
State and insurance components
SUTA is state-specific and employer-specific. Workers compensation depends on state, job classification, payroll, claims history, experience modifier, and carrier pricing.
Benefits benchmark
BLS Employer Costs for Employee Compensation is useful for broad benefits benchmarks, but the calculator lets users choose lean, standard, generous, or custom benefits assumptions.
Where the SUTA line lands in 2026
Employer FICA and FUTA are federal, but the unemployment-insurance line depends on the state. Frequently checked states, each linked to its sourced guide:
- Texas employer payroll taxes — 2.70% new-employer SUTA on $9,000
- Washington employer payroll taxes — employer-specific SUTA on $78,200
- Maryland employer payroll taxes — 2.60% new-employer SUTA on $8,500
- California employer payroll taxes — 3.40% new-employer SUTA on $7,000
- South Dakota employer payroll taxes — 1.75% new-employer SUTA on $15,000
- North Dakota employer payroll taxes — 1.00% new-employer SUTA on $46,600
- Montana employer payroll taxes — 1.18%–2.18% new-employer SUTA range on $47,300
- Arkansas employer payroll taxes — 2.00% new-employer SUTA on $7,000
- Alaska employer payroll taxes — 1.00% new-employer SUTA on $54,200
- Idaho employer payroll taxes — 1.00% new-employer SUTA on $58,300
See the sortable 2026 SUTA rate and wage base table for all 50 states and DC.