Payroll Tax Calculator
Calculates the combined payroll tax owed on employee wages given Social Security and Medicare rates. Useful for employers processing payroll or employees verifying withholding.
About this calculator
Payroll taxes fund Social Security and Medicare (FICA). Both the employer and employee each pay a share, and the calculator computes the combined total using: Payroll Tax = wages × ((socialSecurityRate + medicareRate) / 100). The standard Social Security rate is 6.2% per side (12.4% combined) and applies to wages up to the annual wage base ($160,200 in 2023). The Medicare rate is 1.45% per side (2.9% combined) with no wage cap. Enter the combined or per-party rates depending on whether you want the employer share, employee share, or total. High earners may also face an additional 0.9% Medicare surtax above $200,000, which is withheld only from the employee.
How to use
Assume an employee earns $5,000 in wages this pay period. You want the total combined FICA contribution (both sides). Enter Wages = $5,000, Social Security Rate = 12.4, Medicare Rate = 2.9. The formula gives: $5,000 × ((12.4 + 2.9) / 100) = $5,000 × 0.153 = $765. Of that, $310 goes to Social Security and $145 to Medicare for each party. The employer remits the full $765 to the IRS — $382.50 from the employer and $382.50 withheld from the employee.
Frequently asked questions
What is the difference between the employer and employee share of payroll taxes?
Each side pays an equal share: 6.2% Social Security and 1.45% Medicare, totaling 7.65% per party. The employer withholds the employee's 7.65% from gross wages and matches it with an equal 7.65% contribution, sending the combined 15.3% to the IRS. Employees see their 7.65% deducted on their pay stub. The employer share is a deductible business expense, while the employee share reduces net take-home pay.
Does payroll tax apply to all types of employee compensation?
Most cash wages, salaries, bonuses, and commissions are subject to FICA payroll taxes. However, certain payments like some employee benefits, qualified retirement plan contributions, and health insurance premiums may be exempt depending on how they are structured. Independent contractors are not subject to employer payroll tax withholding; they pay self-employment tax instead. Always consult IRS Publication 15 for a detailed list of taxable and non-taxable compensation.
What is the Social Security wage base and how does it affect payroll tax calculations?
The Social Security wage base is the maximum amount of earnings subject to the 6.2% Social Security tax each year — $160,200 in 2023. Wages above this threshold are exempt from Social Security tax but still subject to the 1.45% Medicare tax with no cap. This means high earners pay a lower effective FICA rate overall. Employers must track each employee's cumulative wages throughout the year to stop withholding Social Security tax once the base is reached.