Payroll & contractors
True Cost of an Employee Calculator
Work out what an employee actually costs your business: wages plus employer FICA, FUTA, state unemployment, workers comp and benefits — with the 2026 rates.
| Gross wage | $65,000 |
|---|---|
| Social Security6.2% of wage | $4,030 |
| Medicare1.45% · no cap | $943 |
| Federal unemploymentFUTA · first $7,000 | $42 |
| State unemploymentSUTA · your rate | $189 |
| Workers compensation | $650 |
| Benefits | $7,200 |
| Total cost to employ | $78,054 |
Employer share only. The 0.9% Additional Medicare Tax on wages above $200,000 is withheld from the employee and is not matched by the employer, so it is left out here. Calculators that include it overstate what you pay for higher earners.
Details people get wrong
- Does the employer pay the 0.9% Additional Medicare Tax?
- No. Employers withhold the 0.9% Additional Medicare Tax from employee wages above $200,000, but they do not match it. Only the regular 1.45% Medicare share is an employer cost. Calculators that add 0.9% to the employer side overstate the cost of high earners.
- Why do I have to enter my own SUTA rate?
- State unemployment tax is specific to both your state and your business — rates are experience-rated, so two employers in the same state pay different rates. Your rate and wage base appear on the annual notice from your state unemployment agency. Any calculator that assumes a single national SUTA number is guessing.
- What is a FUTA credit reduction?
- FUTA is 6.0% on the first $7,000 of wages, reduced by a credit of up to 5.4% for employers current on state unemployment tax — 0.6% effective. States with outstanding federal unemployment loans lose part of that credit, so employers there pay more. The list is redetermined each November, which is why it is an input rather than a built-in assumption.
- Is Social Security capped?
- Yes. For 2026 the employer pays 6.2% on wages up to $184,500. Above that, only the uncapped 1.45% Medicare share continues. This is why burden rate falls as salary rises.