US employer planning | 2026 federal figures
Employee cost calculator
Estimate the annual employer cost of one employee. Federal payroll-tax constants are built in; benefits, state unemployment, workers' compensation, equipment, recruiting, and other costs remain visible assumptions.
Annual cost assumptions
What is included
The estimate starts with annual cash wages. It adds the employer share of Social Security at 6.2% up to the 2026 wage base of $184,500 and Medicare at 1.45% without a wage cap. It also includes a simplified FUTA assumption of 0.6% on the first $7,000 of wages, which assumes the employer receives the maximum state unemployment credit and is not affected by a credit-reduction state.
Benefits, state unemployment, workers' compensation, and fixed costs are supplied by the user because those amounts vary materially by employer, classification, plan design, claims history, and work location.
Why the state wage base is a separate input
State unemployment taxes do not share one nationwide wage base. A common mistake is to multiply every state's rate by the federal $7,000 FUTA wage base. This calculator instead asks for both the state rate and the state taxable wage base. Use the employer's assigned rate notice and the state workforce agency's current wage-base guidance.
Example interpretation
For $70,000 in wages, employer FICA is $5,355 before unemployment taxes: $4,340 of Social Security plus $1,015 of Medicare. If benefits are 18%, that adds $12,600. A 1% workers' compensation assumption adds $700. The state and fixed-cost inputs can then be changed to model the actual hiring location and onboarding plan.
The percentage labeled 鈥渃ost above wages鈥?is the non-wage estimate divided by wages. It is a budgeting ratio, not a published government burden rate.
Important exclusions
- Employee withholding is not an employer cost and is not included.
- The Additional Medicare Tax is withheld from an employee; there is no employer match for that additional amount.
- No local payroll taxes, paid-leave assessments, industry assessments, cafeteria-plan tax effects, or tax credits.
- No overtime, bonus, commission, equity, severance, payroll-provider fees, or multi-year turnover model.
- Workers' compensation is a user estimate, not an insurance quote.
Primary sources
Formula and source review: August 5, 2026. Verify the employer's state rate notice, state wage base, and any credit-reduction status before budgeting or filing.