Methodology

How EmployerCost US calculates estimated employer cost

The calculator separates high-confidence federal payroll tax math from lower-confidence state, insurance, and benefits assumptions.

Formula

social_security = min(salary, 184500) * 0.062
medicare = salary * 0.0145
futa = min(salary, 7000) * (0.006 + state_futa_credit_reduction)
suta = min(salary, state_wage_base) * selected_suta_rate
workers_comp = (salary / 100) * selected_rate_per_100
benefits = salary * selected_benefits_percent
total = salary + social_security + medicare + futa + suta + workers_comp + benefits + admin

Confidence labels

Federal FICA is high-confidence when current-year IRS values are loaded. FUTA is high-confidence but not uniform: employers in a state that owes an unpaid federal unemployment advance lose part of the 5.4% credit, so the rate is 0.6% plus that state's credit reduction. For 2026 this applies to California (U.S. Department of Labor), and it is not final until November 10, 2026. SUTA is medium-confidence unless the user enters the employer's assigned rate. Workers compensation uses each state's published relativity to the national median from the Oregon DCBS premium rate ranking (2024 study, published 2025-06), the standard public cross-state comparison. That is a relativity between states, not any employer's own rate: it remains low-confidence until the user knows the class-code-specific rate and experience modifier.

Update cadence

Federal and state data should be reviewed annually in Q4/Q1 and again when state agencies publish updated wage bases or rate schedules.