See the true cost of each employee. Enter their salary and your state to calculate total employer payroll taxes — FICA, FUTA, and state unemployment.
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See how LeadLock works → Free 14-day trial · No credit cardEmployers pay 6.2% Social Security tax (on wages up to $176,100), 1.45% Medicare tax (no cap), and 0.6% Federal Unemployment Tax (FUTA) on the first $7,000 per employee. Most states add a State Unemployment Tax (SUTA) on top of that — rates vary from under 1% to over 10% depending on your state and claims history.
Typically 1.25–1.4× the base salary when you factor in employer payroll taxes, workers' comp, and benefits. An employee earning $50,000/year often costs $62,000–$70,000 all-in. Use this calculator to get a precise number — the "employer cost" result reflects the true annual cost including all mandatory taxes.
Payroll taxes (Social Security and Medicare) are split between employer and employee, fund specific programs, and are calculated as a flat percentage of wages. Income tax is only withheld from the employee's wages, funds general government operations, and uses graduated rates that depend on total income and filing status. Employers remit both, but only payroll taxes represent an additional cost to the business.
No. Independent contractors are responsible for their own self-employment taxes (the equivalent of both employer and employee Social Security and Medicare). You are required to file a 1099-NEC for any contractor paid $600 or more in a year, but you do not withhold or match payroll taxes. Misclassifying an employee as a contractor can result in significant back taxes and penalties.
The IRS charges a failure-to-deposit penalty starting at 2% for deposits 1–5 days late, rising to 10% if more than 15 days late, and up to 15% if not paid within 10 days of an IRS notice. State penalties vary but are similarly steep. Payroll taxes are considered a trust fund tax — willful non-payment can result in the IRS holding business owners personally liable.