US Payroll Tax Calculator
Calculate federal payroll taxes including Social Security, Medicare and income tax withholding. Shows gross to net pay breakdown for employees.
Employee Salary
Employer Tax Cost
Employer FICA (7.65%):
Salary is 109.30% of total hiring cost
Quick Fact
Hiring a $60k employee actually costs the employer about $64,590 when payroll taxes are included.
Hidden Cost
Employers also pay for health insurance, workers comp, and retirement benefits. Total loaded cost is typically 30-40% above base salary.
Disclaimer:
This calculator uses simplified rates. Actual employer taxes vary by state, industry, and employee classification. SUTA rates depend on company unemployment history. Consult a payroll professional for accuracy.
What Payroll Tax Actually Means in the US
Payroll tax is a US-specific term that usually means FICA: Social Security (6.2% employee + 6.2% employer on wages up to the $168,600 wage base in 2024) and Medicare (1.45% each side on all wages, plus an extra 0.9% employee-only on wages above $200,000). Federal income tax withholding sometimes gets bundled in colloquially, but is technically separate.
On a $100,000 salary, the employer side of FICA alone is $7,650, on top of what they pay you. That is why employers care so much about salary numbers - your $100k offer actually costs them about $115-125k once payroll tax, healthcare, and retirement match are added. The employee side comes off your pay stub as separate Social Security and Medicare line items.
The Wage Base Cap and Why High Earners See It
Social Security tax stops once your year-to-date earnings cross the wage base ($168,600 in 2024). For a $250,000 earner, the SS portion is paid in full by mid-October, then disappears from the rest of the year's checks. Medicare keeps going on every dollar of wages plus the 0.9% additional tax kicks in at $200,000 (single).
If you change jobs mid-year and your combined wages exceed the SS wage base, you may have over-paid Social Security across two employers. The IRS automatically refunds the excess at tax filing - you do not need to do anything special, just make sure both W-2s are entered on the return.
Self-Employed Pay Both Halves
When you are self-employed, you pay both the employer and employee halves of payroll tax - that is the 15.3% self-employment tax (12.4% SS + 2.9% Medicare). The IRS lets you deduct half against your income for income-tax purposes, which slightly softens the hit but does not change the SE tax bill itself.
An S-Corp election can reduce this. As an S-Corp, you pay yourself a 'reasonable salary' through payroll (subject to FICA), then take additional profit as a distribution that is not subject to FICA or SE tax. The savings start to outweigh the administrative cost around $80,000+ of net profit. See the [Self-Employment Tax Calculator](/us-self-employment-tax-calculator) for full math.
State Payroll Adds-Ons
Most states add some form of payroll-style tax: state unemployment insurance (employer-only in nearly all states), state disability insurance (employee-side in California 1.1%, NY $0.60/week, Hawaii partial). California's SDI hits all wages with no cap from 2024 onward; New Jersey's tax has its own unique structure. Pennsylvania has Local Earned Income Tax (LEIT, varies by municipality, typically 1-3%).
On a paystub, these usually show as small line items below FICA: 'CA SDI $11', 'PA LEIT $24.50'. The amounts add up over a year to a few hundred dollars but are easy to overlook when comparing offers across states. Use the [US State Tax Comparison](/us-state-tax-comparison) to see total state burden in one view.
Frequently Asked Questions
Is federal income tax part of payroll tax?
Conversationally yes, technically no. Federal income tax withholding is calculated from your W-4 and the IRS tax tables; payroll tax (FICA) is a flat percentage. Both are deducted via payroll but they are separate tax systems with separate rates.
Why does my employer's match for FICA matter?
It does not affect your take-home directly, but it represents real cost the employer is covering. When negotiating salary, remember they are committing your salary plus 7.65% FICA plus benefits - your full cost is 25-40% above your salary headline.
Do payroll taxes fund Social Security and Medicare?
Officially yes. Social Security and Medicare are funded by FICA collections. In practice, the trust funds are projected to be unable to pay full benefits from the mid-2030s without policy changes, so the relationship between what you pay and what you eventually collect is not a strict 1-to-1.
How can I reduce payroll tax?
Pre-tax payroll deductions for health insurance, HSA contributions, and dependent care FSA reduce wages subject to FICA - genuine savings. Pre-tax 401(k) contributions reduce income tax but NOT FICA. Roth 401(k) contributions reduce neither. The HSA via payroll is the single best tool for FICA reduction.
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