Free payroll tax calculators
(and tax rates) for every state

What is payroll tax (and what’s in it?)

Payroll tax is different from other taxes. This tax only applies to employment income — wages and salaries people earn from working. Here’s what makes payroll tax special: both employers AND employees pay them. Payroll taxes include several components:

• Social Security tax (FICA)
• Medicare tax (FICA)
• Federal unemployment tax (FUTA)
• State unemployment insurance (SUTA)
• Federal and state income tax withholding

As a business owner, you’re responsible for:

1. Withholding the employee portion from their paychecks
2. Contributing your own portion as the employer
3. Making sure it all gets to the government on time and in the right amounts

Payroll tax vs income tax

A topic that often confuses employers is the difference between income tax and payroll tax. While both are deducted from employee paychecks, they serve different purposes when running payroll.

The key difference is that payroll taxes fund specific government benefit programs like Social Security, Medicare, and unemployment insurance that employees may access later, while income taxes support general government services such as funding federal and state government operations, supporting transportation infrastructure, and funding education. See more in our comprehensive guide on how income and payroll taxes work or watch the video below on the differences between each with an OnPay contributor.

Taxes paid by employers on behalf of employees

Withholding is the process by which employers deduct taxes from employee paychecks and send those funds to government agencies on the employee’s behalf. Though the rules and regulations can vary depending on where you do business, employers are typically responsible for withholding state payroll taxes from their employees’ paychecks and making sure they are remitted to the appropriate state agency. This system ensures that taxes are paid efficiently, on time, and throughout the year rather than in one lump sum.

Employers withhold several types of taxes:

• Federal income taxes based on each employee’s W-4 form and IRS withholding tables
• State income taxes (in states that have income tax)
• Employee portion of Social Security tax (6.2%)
• Employee portion of Medicare tax (1.45% plus 0.9% for high earners)
• State disability or other state-specific taxes

The withholding process protects both employees and the government by:

• Spreading tax payments throughout the year
• Reducing the risk of large tax bills at year-end
• Ensuring consistent tax revenue collection
• Helping employees budget by removing taxes before they receive their pay

Employers must deposit these withheld taxes according to IRS schedules – typically monthly or semi-weekly, depending on the employer’s total tax liability.

Employee payroll taxes

Employees pay several payroll taxes that are automatically deducted from their paychecks:

FICA Taxes (Federal Insurance Contributions Act), which includes Social Security and Medicare taxes:

• Social Security tax: 6.2% on wages up to $176,100 (2025 limit) – this is projected to rise to $183,600 in 2026 (not yet final)
• Medicare tax: 1.45% on all wages (no limit)
• Additional Medicare tax: 0.9% on wages over $200,000 annually for single taxpayers ($250,000 if married filing jointly)

Income Tax Withholding:

• Federal income tax: 0% to 37% based on tax brackets and W-4 elections
• Federal Net Investment Income Tax (NIIT) on those with adjusted gross income (AGI) of over $200,000 (single) or $250,000 (married filing jointly)
• State income tax: Varies by state (some states have no income tax)

State-specific taxes (where applicable):

• State disability insurance
• State unemployment insurance (Alaska, New Jersey, Pennsylvania only)
• Other state or local taxes

The total employee payroll tax burden typically ranges from 7.65% to 8.55% of wages for FICA taxes alone, plus income tax withholding based on the employee’s tax bracket and filing status.

• Social Security tax: 6.2% (employee) + 6.2% (employer) = 12.4% total
• Medicare tax: 1.45% (employee) + 1.45% (employer) = 2.9% total
• Additional Medicare Tax: 0.9% (employee only, on wages over $200,000)
• Net Investment Income Tax (NIIT)($200,000 single or $250,000 married filing jointly)

Note: In Alaska, New Jersey, and Pennsylvania, both employees and employers pay SUTA.

Questions about calculating employees’ paychecks?

If it’s time to pay your employees, you’re in the right place! Our free payroll tax calculators make it simple to figure out withholdings and deductions in any state — for any type of payment. Employers can use it to calculate net pay and figure out how much to withhold, so you can be confident about your employees’ paychecks.

We also have special calculators for bonuses, final payments, or any other situation that might arise for employers. Try out our payroll calculators above or read on for a great payroll overview.

To run payroll, you need to do seven things:

1. Get your business set up to run payroll
2. Figure out how much each employee earned
3. Calculate taxes you’ll need to withhold and additional taxes you’ll owe
4. Pay your employees by subtracting taxes (and any other deductions) from employees’ earned income
5. Remit taxes to state and federal authorities
6. File quarterly and year-end payroll tax forms
7. Give your employees and contractors W-2 and 1099 forms so they can do their taxes

The payroll tax calculator above can help you with steps three and four, but it’s also a good idea to either double-check the calculator by using the payroll tax rates below, or save time and effort by using a reliable payroll service.

This payroll tax calculator helps with figuring out federal taxes

The steps our calculator uses to figure out each employee’s paycheck are pretty simple, but there are a lot of them. Here’s how it works, and what tax rates you’ll need to apply.

1. Figure out each employee’s gross wages. Gross wages are the total amount of money your employee earned during the current pay period. The math works a little differently for salaried employees, hourly employees and contractors.
   • Hourly employees: You’ll need to multiply the number of hours your employee worked by their hourly pay rate. If they worked any overtime hours, make sure to calculate those hours at the overtime rate.
   • Salaried employees: A salaried employee is only paid a fraction of their annual salary each paycheck, so divide that employee’s annual salary by the number of pay periods you’ll have each year.
   • Contractors: Advance to “Go” and collect $200! You actually don’t have to withhold any payroll taxes for contractors. Just pay them whatever’s on their invoice, but remember that you’ll need to send each contractor a 1099 form at the end of the year. Keeping good payroll records will make that process a lot easier.
2. Deduct any pre-tax withholdings. Payroll taxes aren’t the only thing to exclude from employees’ paychecks. Make sure to deduct for things like health and retirement benefits. The process for documenting and remitting these funds will vary depending on your benefits providers. Note that many services can be integrated with payroll software, which allows you to automate your deductions.
3. Deduct and match any FICA taxes: FICA, the Federal Insurance Contributions Act, is one of the many payroll acronyms you’ll soon get to know and love. It simply refers to the Medicare and Social Security taxes employees and employers have to pay:
   • Social Security tax: Withhold 6.2% of each employee’s taxable wages until they earn gross pay of $176,100.00 in a given calendar year (the wage base is projected to reach $183,600 in 2026). But for now, the maximum an employee will pay in 2025 is $10,918.20. As the employer, you must also match your employees’ contributions.
   • Medicare tax: Under FICA, you also need to withhold 1.45% of each employee’s taxable wages for Medicare. Employers must match this tax as well. There’s no withholding limit like the one for Social Security, but well-compensated employees who earn more than $200,000 must pay an Additional Medicare Tax of 0.9%. You don’t have to match the 0.9%, but you should include it in your withholding calculations.
4. Pay FUTA unemployment taxes: Employers are solely responsible for paying federal unemployment taxes. The tax rate is 6% of the first $7,000 of taxable income an employee earns annually. If your company is required to pay into a state unemployment fund, you may be eligible for a tax credit.
5. Deduct federal income taxes, which can range from 0% to 37%. Withholding information can be found through the IRS Publication 15-T.
6. Subtract any post-tax deductions: Some employees may be responsible for court-ordered wage garnishments or child support. They may also choose to make post-tax contributions to savings accounts, elective benefits (like life insurance), or other withholdings.

Quarterly filing and compliance requirements

We’ve covered a lot of ground, but we’d be remiss if we didn’t mention that, beyond calculating and paying taxes, employers have ongoing filing and reporting obligations. Below, is a table that breaks down the deadlines and deposit schedules that apply to payroll taxes:

Tax deposit schedules

Your deposit schedule depends on your total tax liability in the prior year.

Missing any of the deadlines above can result in penalties and unwanted attention from Uncle Sam, so it makes good business sense to have a recordkeeping process in place so timely filing does not fall by the wayside.

Our payroll calculator supports multiple states

Now that we’ve covered some quick facts about federal taxes and how they apply when using our payroll calculators, it’s important to remember that you’re likely responsible for state payroll taxes as well.

Though the rules and regulations can vary depending on where you do business, employers are typically responsible for withholding state payroll taxes from their employees’ paychecks and making sure they are remitted to the appropriate state agency.

State payroll taxes, which are usually based on a percentage of each employee’s gross income, are commonly used to fund unemployment and disability benefits for workers, and can sometimes be used toward other state-specific programs. State unemployment insurance (SUTA) is typically an employer-only payroll reduction, and companies that have employees are generally responsible for contributing once a quarter. There are some exceptions to this rule however. For instance, in the states of Alaska, New Jersey, and Pennsylvania, both employees and employers pay SUTA.