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 includes Social Security and Medicare. FUTA applies to the first $7,000 of wages and is usually modeled at the effective 0.6% rate when the employer qualifies for the full state unemployment tax credit.

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.