What does an employee really cost?
Enter a yearly wage and the work state to see the payroll taxes the employer pays on top of it: Social Security, Medicare, federal unemployment (FUTA) and state unemployment (SUI). Uses the same 2026 rates and wage bases as LeoFolio Pay Run.
Enter the wage and state
Use the wages you expect to pay this employee in 2026. Unemployment taxes stop once wages reach each wage base, so most of them are paid early in the year.
Employer cost for 2026
Before benefits, workers’ compensation insurance and any employer-paid state programs.
—Tax by tax
Employer-paid state programs (such as paid family and medical leave, or training funds), local employer taxes, workers’ compensation and benefits. LeoFolio Pay Run calculates the state program shares it supports for each run.
Medicare = 1.45% × all wages
FUTA = 0.6% × wages up to $7,000
SUI = state rate × wages up to the state wage base
How the employer’s share is worked out
Social Security and Medicare are shared: the employee pays 6.2% and 1.45% through withholding, and the employer pays the same again. Social Security stops at the 2026 wage base of $184,500. The 0.9% Additional Medicare Tax on wages over $200,000 is withheld from the employee only. Federal unemployment is paid by the employer alone: 6.0% of the first $7,000, reduced to 0.6% when the full 5.4% credit for state unemployment taxes applies. State unemployment rates are set by each state for each employer, so new employers start on a state-assigned rate until they have their own history.
FUTA credit reductions are announced in November
When a state has an outstanding federal unemployment loan, employers there lose part of the 5.4% credit and owe extra FUTA with the fourth-quarter deposit or Form 940. The U.S. Department of Labor names the 2026 credit-reduction states after November 10, 2026; California was listed as at risk. This calculator shows the standard 0.6% and notes the possible increase.
Official sources
Social Security and Medicare rates, the Social Security wage base and FUTA come from IRS Publication 15 (Circular E) for 2026. State unemployment wage bases and new-employer rates are the 2026 figures LeoFolio Pay Run uses; each state agency’s rate notice is the final word for your business.
Employer cost FAQ
What the calculator includes, and what it leaves out.
How much does an employee cost on top of wages?
For most U.S. employers, payroll taxes add about 7.65% for Social Security and Medicare, plus federal and state unemployment taxes on the first part of each employee’s wages. Benefits, workers’ compensation and any employer-paid state programs come on top of that.
Why does the percentage fall as wages rise?
Federal and state unemployment taxes stop at their wage bases, and Social Security stops at $184,500 in 2026. Medicare has no wage base.
Where do I find my state unemployment rate?
Your state unemployment agency sends a rate notice, usually once a year. New employers receive a starting rate when they register. Enter it in the optional rate field to replace the estimate.
Does this include employer-paid paid-leave programs?
No. Some states charge employers a share of paid family and medical leave or other programs, often only above a headcount. LeoFolio Pay Run calculates the employer shares it supports for each run.
Are the wages I enter stored?
No. The calculation runs in your browser and the amounts are not sent to LeoFolio.