What is the difference between payroll tax and income tax?

Payroll taxes (FICA) fund Social Security and Medicare and are a flat percentage of wages. Income tax uses progressive brackets and funds general government operations. Both are withheld from paychecks, but payroll tax applies equally to all earnings up to the Social Security cap regardless of deductions.

Does the employer pay payroll taxes too?

Yes. The employer matches the employee's Social Security (6.2%) and Medicare (1.45%) taxes. However, the employer does not pay the additional 0.9% Medicare tax on wages over the filing-status threshold. The employer's share is an additional cost on top of the employee's gross wages.

What is the Social Security wage base for 2026?

The Social Security wage base for 2026 is $184,500. Earnings above this amount are not subject to the 6.2% Social Security tax. Medicare tax has no wage base limit and applies to all earnings.

When does the additional Medicare tax kick in?

The additional 0.9% Medicare tax applies to wages exceeding $200,000 for single and head of household filers, $250,000 for married filing jointly and qualifying surviving spouse filers, and $125,000 for married filing separately. Only the employee pays this tax.

Are payroll taxes refundable?

Generally no. Payroll taxes are not refundable on your tax return. However, if you work for multiple employers and your combined Social Security wages exceed the wage base, you can claim a credit for excess Social Security tax withheld on your Form 1040.

How do payroll taxes affect self-employed workers?

Self-employed workers pay both halves through the self-employment tax, which is 15.3% total before the above-the-line deduction for the employer-equivalent portion. The calculation uses 92.35% of net self-employment income as the base.

Payroll Tax Calculator

Free payroll tax calculator. Calculate Social Security, Medicare, and additional Medicare taxes for both employee and employer. 2026 wage base and rates.

Annual Gross Wages

Pay Frequency

Filing Status

Employee Share

$9,180.00

7.65%

Employer Share

$9,180.00

7.65%

Combined Total

$18,360.00

15.3%

Tax Component	Rate	Employee	Employer
Social Security	6.2%	$7,440.00	$7,440.00
Medicare	1.45%	$1,740.00	$1,740.00
Total	15.3%	$9,180.00	$9,180.00

Employee per Paycheck

$353.08

Bi-Weekly (26/yr)

Employer per Paycheck

$353.08

Bi-Weekly (26/yr)

Social Security Wage Base

2026 Wage Base Limit:$184,500.00

Additional Medicare Threshold:$200,000.00 (single)

$64,500.00 remaining before reaching the SS cap.

$0$184,500.00

Based on 2026 payroll tax rates. Social Security is capped at $184,500, and Additional Medicare depends on filing status. Does not include FUTA or state taxes.

Planning notes, formulas, and examples

About the Payroll Tax Calculator

The Payroll Tax Calculator computes the full payroll tax burden for both employees and employers based on gross wages. Payroll taxes fund Social Security and Medicare and are split between the employee and employer, with both sides paying the same Social Security and Medicare rates and the employee alone paying any Additional Medicare tax that applies.

For 2026, Social Security tax is 6.2% on wages up to the $184,500 wage base, Medicare tax is 1.45% on all wages, and Additional Medicare is 0.9% above the filing-status threshold that applies to the employee. Understanding the combined payroll tax helps workers check pay stubs and helps employers estimate total compensation cost.

Enter gross annual wages to see the complete breakdown for both sides. The calculator stays focused on withholding and employer cost; it does not estimate income tax, FUTA, or state payroll taxes. That makes it a cleaner worksheet for payroll math without pretending to be a full tax return.

When This Page Helps

Employees use this calculator to verify paycheck deductions, and employers use it to estimate the real cost of labor beyond base wages. It shows both sides clearly and keeps the payroll math separate from income tax assumptions.

How to Use the Inputs

Enter the employee's annual gross wages.
Select the pay frequency for per-paycheck amounts.
Choose the filing status used for the employee Additional Medicare threshold.
View the Social Security, Medicare, and additional Medicare taxes.
See both employee and employer portions, plus the combined total.

Formula used

Employee SS Tax = Min(Wages, $184,500) x 6.2%
Employer SS Tax = Min(Wages, $184,500) x 6.2%
Employee Medicare = Wages x 1.45% + Max(0, Wages - filing-status threshold) x 0.9%
Employer Medicare = Wages x 1.45% (no Additional Medicare for employer)
Total Payroll Tax = Employee Share + Employer Share

Example Calculation

Result: Employee: $9,180 | Employer: $9,180 | Total: $18,360

On $120,000 wages: SS tax = $120,000 x 6.2% = $7,440 each. Medicare = $120,000 x 1.45% = $1,740 each. No Additional Medicare applies at that income level for a single filer. Employee total = $9,180. Employer total = $9,180. Combined payroll tax = $18,360 (15.3% effective rate).

Tips & Best Practices

The employer pays the same SS and Medicare rates as the employee (6.2% + 1.45%).
The additional 0.9% Medicare tax applies only to the employee, not the employer.
The SS wage base ($184,500 for 2026) means high earners stop paying SS tax on income above this amount.
Self-employed individuals pay both halves (15.3% total) through self-employment tax.
Payroll taxes are separate from income tax withholding shown on your pay stub.
Employers also pay FUTA (Federal Unemployment Tax) of 6% on the first $7,000 of wages, before credits.

The True Cost of Employment

Employers should consider total compensation cost, which includes wages plus their share of payroll taxes. For a $100,000 salary, the employer pays an additional $7,650 in FICA taxes, plus FUTA, state unemployment taxes, and any benefits. The true cost of an employee is typically 20-30% above their salary.

Payroll Tax Caps and High Earners

Once wages exceed the Social Security wage base ($184,500), the effective payroll tax rate drops because no more Social Security tax is owed. The remaining Medicare tax (1.45% plus any filing-status-based Additional Medicare) continues on all earnings. This means payroll tax is regressive in the Social Security portion, with a larger percentage burden on lower wages.

Multiple Employers

If you work for multiple employers, each employer withholds Social Security tax independently up to the wage base. If your combined wages exceed $184,500, excess Social Security tax can be claimed as a credit on your tax return.

Sources & Methodology

Last updated: March 26, 2026

Methodology

This calculator multiplies annual wages by the 2026 employee Social Security rate of 6.2% up to the 2026 wage base of $184,500. It applies Medicare to all wages, then applies the 0.9% Additional Medicare tax only after the filing-status threshold selected on the page. The employer side includes Social Security and Medicare matching but never Additional Medicare.

The page is a payroll withholding worksheet, not a full tax return model. It does not include FUTA, state payroll taxes, income tax withholding, or employer-specific fringe costs. Filing status matters only for the employee Additional Medicare threshold.

Sources

2026 Cost-of-Living Adjustment Fact Sheet (Social Security Administration) — Provides the 2026 Social Security taxable maximum of $184,500 and confirms the current employee payroll tax rate.
Topic no. 751, Social Security and Medicare withholding rates (Internal Revenue Service) — Provides the 0.9% Additional Medicare tax thresholds by filing status.

Frequently Asked Questions

Payroll taxes (FICA) fund Social Security and Medicare and are a flat percentage of wages. Income tax uses progressive brackets and funds general government operations. Both are withheld from paychecks, but payroll tax applies equally to all earnings up to the Social Security cap regardless of deductions.