Payroll Tax Calculator
Compute the combined Social Security, Medicare, and FUTA unemployment taxes owed on an employee's wages after pre-tax contributions. Essential for employers running payroll or freelancers verifying withholding.
About this calculator
Payroll taxes in the U.S. consist of three main components. Social Security tax is 6.2% of taxable wages (up to the annual wage base). Medicare tax is 1.45% of all taxable wages. The Federal Unemployment Tax (FUTA) is 0.6% of the first $7,000 of wages per employee after the standard credit. Taxable wages equal gross wages minus pre-tax contributions such as 401(k) or health insurance premiums. The combined formula is: Payroll Tax = (Gross Wages − Pre-tax Contributions) × 0.062 + (Gross Wages − Pre-tax Contributions) × 0.0145 + min(Gross Wages − Pre-tax Contributions, $7,000) × 0.006. This represents the employer-side liability; employees pay the same Social Security and Medicare rates through withholding.
How to use
Assume gross wages of $5,000 and pre-tax contributions of $500. Step 1: Taxable wages = $5,000 − $500 = $4,500. Step 2: Social Security = $4,500 × 0.062 = $279.00. Step 3: Medicare = $4,500 × 0.0145 = $65.25. Step 4: FUTA = min($4,500, $7,000) × 0.006 = $4,500 × 0.006 = $27.00. Step 5: Total payroll tax = $279.00 + $65.25 + $27.00 = $371.25.
Frequently asked questions
What is the difference between employee and employer payroll taxes?
Both the employee and employer each pay 6.2% for Social Security and 1.45% for Medicare, making the combined FICA rate 15.3% split equally. The employee's share is withheld directly from their paycheck, while the employer remits their matching share separately. FUTA, however, is paid entirely by the employer and is not deducted from the employee's wages. Some states also impose additional unemployment taxes (SUTA) on top of the federal rate.
How do pre-tax contributions reduce payroll taxes?
Pre-tax contributions—such as 401(k) deferrals, HSA contributions, or employer-sponsored health insurance premiums—lower the amount of wages subject to Social Security and Medicare taxes. For example, contributing $500 per paycheck to a 401(k) reduces your taxable wages by $500, saving roughly $38.25 in FICA taxes on that amount. This is one reason employer-sponsored benefits are financially advantageous beyond their direct value. Note that some benefits, like Roth 401(k) contributions, do not reduce FICA taxable wages.
When does the Social Security wage base limit affect payroll tax calculations?
The Social Security tax only applies to wages up to an annual wage base, which was $168,600 in 2024. Once an employee's cumulative earnings exceed this threshold, no further Social Security tax is withheld or matched by the employer for the rest of the year. Medicare tax, however, has no wage base limit and continues at 1.45% on all wages, with an additional 0.9% surtax on wages above $200,000. Employers must track each employee's year-to-date wages to apply these limits correctly.