Employer payroll taxes explained state by state

Federal Insurance Contributions Act, better known as FICA

The employer matches the employee on two components. Social Security is 6.2 percent of wages up to an annual taxable maximum that rises most years. Medicare is 1.45 percent of all wages with no ceiling.

There is an additional Medicare surcharge on high earners, but that one is withheld from the employee only. The employer does not match it.

The practical effect of the Social Security cap is that employer FICA falls as a percentage of pay once a salary crosses it. A 90,000 dollar salary attracts the full 7.65 percent. A 300,000 dollar salary attracts noticeably less in percentage terms.

Federal Unemployment Tax Act, better known as FUTA

The headline rate is 6 percent, but employers who pay their state unemployment tax on time receive a credit of 5.4 percent, leaving an effective 0.6 percent. It applies only to the first 7,000 dollars of each employee's wages, so the maximum is 42 dollars per employee per year in most cases.

One exception matters. States that borrowed from the federal unemployment fund and did not repay can lose part of that credit, which raises the effective FUTA rate for every employer in that state. Check the current credit reduction list each January.

State unemployment insurance, known as SUTA or SUI

This is where employers see genuine variation, driven by two numbers.

• The taxable wage base. Some states tax only the first 7,000 dollars of wages. Others tax over 50,000 dollars. Same employee, very different bill.
• Your experience rate. States assign each employer a rate based on how many former employees have drawn benefits. A new employer gets a default rate. A stable employer with no claims can drift toward the bottom of the schedule, and an employer with frequent layoffs can end up several times higher.

Because rates are employer specific, no calculator can tell you your exact number. What it can do is show a defensible band. That is what the table below supports.

Representative 2026 planning figures by state

Mid range assumptions for an established small or mid size employer. Your assigned rate notice from the state is always the authority.

Other state and local levies to watch

• Paid family and medical leave programmes now operate in a growing list of states, some employer funded, some shared with the employee.
• A handful of cities and counties levy their own payroll or head taxes above a headcount or payroll threshold.
• Employment training assessments and administrative surcharges are small but add up across a large payroll.

None of these change the shape of a hiring budget. Together they usually add well under 1 percent of payroll, which is inside the range our calculators already carry.