What payroll taxes does the employer pay?
In the US, employers usually pay payroll taxes on top of employee wages, including the employer share of Social Security and Medicare, plus federal and state unemployment taxes. The exact taxes and rates depend on your state and situation, so confirm details with a qualified payroll provider or tax professional.
The short answer
Most employers pay more than just gross wages. In general, the employer pays a share of payroll taxes for each employee, and may also owe unemployment taxes at the federal and state level.
The main employer payroll taxes are usually: employer Social Security tax, employer Medicare tax, Federal Unemployment Tax (FUTA), and State Unemployment Tax (SUTA), if your state has it. Some states also have other payroll-related taxes or insurance programs.
RunWise Pay is a free matching service, not a payroll provider, accountant, or tax advisor. We do not run payroll or file taxes, but we can help you get connected with providers that handle payroll tax calculations and filings.
What employers usually pay
- Social Security tax: Employers generally pay a matching share of Social Security tax on employee wages, up to the yearly wage cap set by the IRS.
- Medicare tax: Employers generally pay a matching share of Medicare tax on all covered wages.
- Unemployment taxes: Employers may pay FUTA at the federal level and SUTA at the state level. These taxes help fund unemployment benefits.
- State-specific payroll costs: Some states add disability insurance, paid family leave, or other employer costs.
The employee may also have taxes withheld from each paycheck, but that is separate from what the employer pays. A payroll service usually calculates both sides, keeps track of tax deadlines, and files forms for you if that service is included.
A simple example of payroll cost
If you pay an employee $4,000 in wages for the month, your total employer payroll cost may be higher than $4,000 because of employer payroll taxes and any required state programs.
The exact extra cost depends on the employee’s wages, your state, whether the worker is classified correctly, and whether your business qualifies for any unemployment tax rate changes. This is why two businesses with the same headcount can still have different payroll costs.
If you are comparing payroll services, ask for a clear written list of what is included: tax calculations, tax filing, year-end W-2 and 1099 forms, direct deposit, new-hire setup, support, and any extra fees. Vague pricing and hidden fees are red flags.
What to ask a payroll provider
When you talk to a payroll service, ask them to explain which employer taxes they handle, which forms they file, and whether they guarantee tax filing as part of the service.
Use this checklist:
- What federal, state, and local payroll taxes do you calculate and file?
- Do you handle W-2s and 1099s at year end?
- Are there extra fees for setup, off-cycle pay runs, new states, or corrections?
- What support do I get if I make a payroll mistake?
- Can you confirm everything in writing before I sign?
Good providers should answer clearly. Be careful if pricing is vague, support is hard to reach, or they pressure you to sign quickly.
How RunWise Pay can help
If you are setting up payroll for the first time, switching providers, or fixing a payroll problem, RunWise Pay can match your business with payroll service providers that fit your needs.
The service is free for your business. You share only basic contact and business intent details, like your business name, contact name, phone number, optional email, how many people you pay, your state, and your preferred language. We do not ask for SSNs, EINs, bank account numbers, or employee records.
Start here: Get matched. If you want more plain-language help first, visit our guides or read about services.
Employers usually pay their own share of payroll taxes on top of wages, and a payroll provider can help calculate and file them if that service is included.