Free staff pay & hr tool
Employee Cost Calculator: Payroll Taxes and Total Cost
The cost of an employee is their wage plus employer payroll taxes, benefits and insurance. Employer FICA alone is 7.65% (6.2% Social Security up to the $184,500 wage base in 2026, plus 1.45% Medicare). On a $60,000 wage, payroll taxes come to about $4,821, so the cost is $64,821 before benefits. Add your benefits below to see the full total.
Prepared by Prospyr · Reviewed October 3, 2026 · Free, no sign-up, runs in your browser
Total yearly cost to employ
$64,821
1.08× the wage: 8% on top of pay, or $31.16 per paid hour.
- Wages$60,000
- Social Security (6.2%)$3,720
- Medicare (1.45%)$870
- FUTA (0.6%)$42
- State unemployment (SUTA)$189
An estimate for planning, not tax or legal advice. Rates and wage bases change; confirm with your payroll provider or CPA.
Employer payroll tax calculator: what the math covers
- Social Security: 6.2% of wages up to the 2026 wage base of $184,500 (maximum $11,439 per employee).
- Medicare: 1.45% of all wages, no cap.
- FUTA: 0.6% net on the first $7,000 (6.0% less the 5.4% credit).
- SUTA: your state rate on your state's wage base. You enter both.
- Benefits and insurance: the employer share of health premiums, a retirement match as a percent of wages, workers' comp priced per $100 of payroll, and other costs.
Cost of employee = wage + Social Security + Medicare + FUTA + SUTA + benefits + workers' comp + other.
Worked example: a $60,000 employee
| Item | Math | Cost |
|---|---|---|
| Wage | $60,000 | |
| Social Security | 60,000 × 6.2% | $3,720 |
| Medicare | 60,000 × 1.45% | $870 |
| FUTA | 7,000 × 0.6% | $42 |
| SUTA (example) | 7,000 × 2.7% | $189 |
| Health premium | $400 × 12 | $4,800 |
| Retirement match | 60,000 × 3% | $1,800 |
| Workers' comp | 600 × $1.50 | $900 |
| Total | $72,321 (1.21×) |
With no benefits the same employee costs $64,821, a 1.08 multiplier. Most of the gap between a wage and its true cost is benefits, not tax.
Using the employer cost of an employee to price services
The per-hour figure in the result is the loaded cost of one paid hour. It is the number to use when you price a treatment or decide what a provider has to book to cover their pay. Staff cost is one of the largest lines in a med spa budget; the med spa startup cost calculator shows where it sits next to rent, equipment and inventory.
Weighing a wage change? Run it through the salary increase calculator first, then come back here for the full cost.
What this calculator leaves out
State and local payroll taxes beyond SUTA (some states add disability, paid family leave or training taxes), local taxes, and employee-paid withholding are not included. Wage bases and rates change every year. Treat the result as a planning estimate and confirm it with your payroll provider or CPA.
Frequently asked questions
How much does an employee cost on top of their salary?
Payroll taxes alone add roughly 8% to 10% of wages for most employees. Health premiums, retirement match and workers' comp usually push the total to 1.2 to 1.4 times the wage. The right number for your practice depends on your benefits, so enter them in the calculator.
What payroll taxes does an employer pay?
Employers pay 6.2% Social Security on wages up to the annual wage base ($184,500 for 2026) and 1.45% Medicare on all wages. They also pay federal unemployment tax (FUTA) and state unemployment tax (SUTA). Employees pay their own matching FICA share through withholding, and the 0.9% Additional Medicare Tax over $200,000 is employee-only.
How does FUTA work?
FUTA is 6.0% on the first $7,000 paid to each employee. Employers who pay state unemployment tax in full and on time can take a credit of up to 5.4%, which leaves a net rate of 0.6%, or $42 per employee. The credit is reduced in states with outstanding federal loans (credit reduction states).
What is the SUTA rate?
It depends on your state, your industry and your claims history, and it applies to a state-set wage base that varies a lot. The 2.7% default here is a placeholder. Use the rate and wage base on your state unemployment notice.
What is the employer cost multiplier?
It is total cost divided by wage. A $60,000 wage with a $72,321 total cost is a 1.21 multiplier. Many practices plan with a number between 1.2 and 1.4 and then check it against their real benefit costs.
Does this include PTO, bonuses or overtime?
Paid time off is already inside the wage you enter. Add bonuses or expected overtime to the wage, because payroll taxes apply to them too. Training, licensing and similar costs go in the Other field.
Sources and scope
- IRS Topic No. 751, Social Security and Medicare withholding rates
6.2% Social Security and 1.45% Medicare for employers; 2026 Social Security wage base of $184,500; Additional Medicare Tax of 0.9% above $200,000 is employee-only.
- IRS Topic No. 759, Form 940 and FUTA
FUTA is 6.0% on the first $7,000 per employee; a credit of up to 5.4% leaves 0.6%; credit-reduction states pay more.
A planning estimate, not tax, payroll or legal advice. Rates, wage bases and state rules change; confirm with your payroll provider or CPA.