Employer Payroll Taxes: Costs, Due Dates, and Forms Explained

What Payroll Taxes Really Cost an Employer

0:00 If you hire someone for $60,000, they’ll actually cost you closer to $65,000. That extra money? Payroll tax.

0:09 And it isn’t one tax. It’s four. Get them right, and nobody notices. Get them wrong, and the IRS definitely does. But you don’t need to be a tax expert. You just need to know what you owe and when it’s due.

Payroll Taxes vs. Income Taxes

0:28 First, what is payroll tax? It’s federal and state tax tied to your employees’ wages. Income tax applies to all kinds of income. Payroll taxes apply only to wages and salaries, and they fund Social Security, Medicare, and unemployment. That’s payroll taxes vs. income taxes. Now, the four.

Withholding, FICA, FUTA, and SUTA

0:55 One: income tax withholding. Your employee’s W-4 tells you how much to hold back. They pay it. You collect it and send it in.

1:06 Two: FICA. That’s Social Security tax and Medicare. Your employee pays 6.2% and 1.45%, and you match both, dollar for dollar. Social Security tax has a cap. Medicare has no cap. And for pay over $200,000, you withhold an extra amount.

1:33 Three: FUTA, federal unemployment tax. This one’s all yours. It’s 6% on the first $7,000 of wages, but a state credit can drop it to 0.6%. That’s $42 per employee.

1:53 Four: SUTA, state unemployment tax. It works like an insurance premium. Your state sets your rate based on your claims history.

Adding Up the Employer's Share

2:03 What does that add up to? For one employee earning $60,000; your share runs roughly $4,700 to $4,900 a year. About 8% on top of salary.

When Payroll Taxes Are Due

2:20 So, when are payroll taxes due? That depends on your payroll tax deposit schedule. Had $50,000 or less in liability during the IRS lookback period?

2:34 You deposit monthly. More than that? Semiweekly, days after each payday.

Deposits vs. Filings: The Forms To Know

2:42 Paying on time is half the job. The other half? Showing your work. That’s what filings are for. They report what you withheld and what you paid.

2:55 Every quarter, Form 941 covers income tax withholding plus both halves of FICA. Once a year, Form 940 handles FUTA. And at year-end, each employee gets a W-2 showing their wages and withholding.

3:14 That’s a lot to track every pay period.

How Paychex Can Help

3:18 Paychex helps automate payroll taxes by calculating, filing, and paying your federal, state, and local taxes for you. It’s designed to keep you ahead of filing deadlines, supports multi-state compliance, and can help you find tax credits that put money back in your business. It’s included in most Paychex payroll packages.

3:45 Our tech handles the math, and real people have your back, with 24/7 support whenever you need it.

Wrap Up

3:54 Want to see your numbers? Try the employer payroll tax calculator below and get the full Employer’s Guide to Payroll Taxes to learn how to calculate payroll taxes step by step.

4:06 And subscribe for more guidance on payroll, HR, and everything in between.