About the payroll calculator
A payroll calculator is a small business and HR tool that estimates the fully loaded cost of an employee for the employer (gross wages plus employer payroll taxes) and the take-home pay for the employee (gross minus federal, state, FICA, and voluntary deductions) so both sides can budget a hire accurately.
How it works
Employer cost = Gross salary + (Gross x Employer tax %) Employee net = Gross salary - (Gross x Employee tax %) US FICA total = 6.2% Social Security + 1.45% Medicare = 7.65% each side SS wage base = $176,100 (2026); Medicare has no cap
- Gross salary = annual wage agreed in the offer letter, before any deduction.
- Employer tax % = at minimum 7.65% FICA, plus FUTA 0.6% on first $7,000, plus state SUTA (typically 1 to 3%).
- Employee tax % = combined federal income tax (10 to 37%), FICA 7.65%, state income tax (0 to 13.3%), and any 401(k) or benefit deductions.
Worked example
A small business in Texas hires an admin at a $50,000 annual salary in 2026. The state has no income tax, so the employee owes only federal tax and FICA. The employer pays FICA plus FUTA and SUTA:
- Gross salary: $50,000 per year.
- Employer FICA (7.65%): $50,000 x 0.0765 = $3,825.
- FUTA (net 0.6% on first $7,000): $42.
- Texas SUTA (~2.7% on first $9,000): $243.
- Total employer cost: $50,000 + $3,825 + $42 + $243 = $54,110.
- Employee FICA (7.65%): $3,825.
- Federal income tax (single, standard deduction): roughly $4,150 on $34,400 taxable.
- Employee net pay: $50,000 - $3,825 - $4,150 = $42,025 per year.
2026 US payroll tax reference
| Tax | Rate | Wage base / cap | Paid by |
|---|---|---|---|
| Social Security | 6.2% | $176,100 | Employer + employee (each) |
| Medicare | 1.45% | None | Employer + employee (each) |
| Additional Medicare | 0.9% | Above $200K single / $250K joint | Employee only |
| FUTA (federal unemployment) | 0.6% net (6% gross less 5.4% credit) | First $7,000 | Employer only |
| SUTA (state unemployment) | 0.1 to 6% (varies) | $7K to $67K (state dependent) | Employer only (most states) |
2026 federal income tax brackets (single): 10% to $11,925; 12% to $48,475; 22% to $103,350; 24% to $197,300; 32% to $250,525; 35% to $626,350; 37% above. Standard deduction $15,600 (single), $31,200 (married joint).
Common pitfalls
- Forgetting the Social Security wage base. Employer SS tax stops after $176,100 of wages per employee in 2026. High-salary hires save you about $1,756 per year per employee above the cap.
- Mixing W-2 and 1099. Contractors are not on payroll: you pay no FICA, FUTA, or SUTA, but the IRS imposes strict tests. Misclassification penalties can hit 20% of unpaid taxes plus interest.
- Ignoring state-specific taxes. California has SDI (1.1%), New York has SDI and PFL, Oregon has Statewide Transit Tax. These are real payroll costs the textbook FICA model skips.
- Underbudgeting benefits. Health insurance alone runs $7,000 to $25,000 per employee per year, often dwarfing payroll tax. Most loaded-cost ratios of 1.25 to 1.4x come from benefits, not taxes.
- Late SUTA filings. The FUTA 5.4% credit only applies if state unemployment is paid by January 31. Miss the deadline and your FUTA rate jumps from 0.6% to the full 6.0%.
Related calculators on 3Tej
Frequently asked questions
What is the true cost of an employee beyond their salary?
Most US employers spend 1.25 to 1.4 times base salary once you add employer FICA (7.65 percent up to the Social Security wage base of $176,100 in 2026), federal and state unemployment (FUTA 0.6 percent on the first $7,000, SUTA varies by state), workers compensation, health insurance, retirement match, and equipment. A $50,000 salaried hire typically costs $62,500 to $70,000 per year fully loaded.
How does FICA work and what is the 2026 Social Security wage base?
FICA is a 15.3 percent payroll tax split evenly between employer and employee at 7.65 percent each. It funds Social Security (6.2 percent on wages up to the $176,100 wage base in 2026) and Medicare (1.45 percent on all wages, with an extra 0.9 percent Additional Medicare Tax on employee wages above $200,000). The Social Security cap rises with the national average wage index each year.
What is the difference between gross and net pay?
Gross pay is the agreed wage before any deductions. Net pay is what lands in the employee's bank account after federal income tax withholding, state and local tax, employee FICA (7.65 percent), and voluntary deductions like 401(k) contributions, health premiums, FSA, and HSA. For a $50,000 single-filer in 2026 the net is usually around $41,000 to $42,000 depending on the state.
Do I need to pay FUTA and SUTA on every employee?
Yes, but both are capped. FUTA is 6 percent on the first $7,000 of each employee's wages, with a 5.4 percent credit if you pay state unemployment on time, leaving a net 0.6 percent or $42 per employee per year. SUTA wage bases and rates vary by state, typically $7,000 to $67,000 at rates between 0.1 and 6 percent depending on your experience rating.
Sources
- IRS Publication 15 (Circular E) - Employer's Tax Guide, 2026 edition.
- Social Security Administration - 2026 Cost-of-Living Adjustment (wage base $176,100).
- US Department of Labor - FUTA Credit Reduction states 2026.
- Bureau of Labor Statistics - Employer Costs for Employee Compensation, March 2026.