2026 payroll tax rates: FICA, FUTA and federal limits

2026 federal payroll tax rates at a glance

Social Security

6.2% + 6.2%employer and employee, on the first $184,500

Medicare

1.45% + 1.45%no wage cap; employee adds 0.9% over $200,000

FUTA

0.6% net6.0% on the first $7,000, less up to 5.4% credit

2027 wage base

$192,300Social Security, per SSA (Oct 14, 2026)

These are the federal taxes on every W-2 paycheck. State unemployment tax (SUTA), state income tax withholding and state paid leave programs come on top and differ by state. The state figures are in our 2026 SUTA rates and wage bases by state table and on each state page.

FICA tax rate for 2026: Social Security and Medicare

FICA is two taxes. Social Security is 6.2% from the employer and 6.2% from the employee, on wages up to $184,500 in 2026. Medicare is 1.45% from each side on all wages, with no cap. Together that is 7.65% each, or 15.3% of pay for most employees.

• Most Social Security tax per employee in 2026: $184,500 x 6.2% = $11,439 from you, and the same $11,439 withheld from the employee.
• Most Social Security tax per employee in 2027: $192,300 x 6.2% = $11,922.60 from each side. The SSA certified the 2027 wage base on October 14, 2026.
• Medicare: no maximum. A $300,000 salary costs you $300,000 x 1.45% = $4,350 in employer Medicare.

Additional Medicare Tax: employee only

Once an employee's wages from you pass $200,000 in the calendar year, you must withhold an extra 0.9% from the wages above that line. The IRS says this trigger applies regardless of the employee's filing status, and there is no employer match. Example: an employee paid $250,000 has ($250,000 minus $200,000) x 0.9% = $450 of Additional Medicare Tax withheld. Your employer Medicare stays at 1.45% of $250,000 = $3,625.

FUTA tax rate for 2026 and the California credit reduction

The federal unemployment tax (FUTA) is 6.0% on the first $7,000 of each employee's wages. Employers that pay state unemployment tax on time get a credit of up to 5.4%, so the usual net rate is 0.6%. That is $7,000 x 0.6% = $42 per employee per year. Employees pay none of it (IRS Topic 759, updated Sep 24, 2026).

Credit reduction states

When a state borrows from the federal government to pay unemployment benefits and does not repay on time, employers in that state lose part of the 5.4% credit. The Department of Labor publishes a potential list each January and the final list after November 10.

If California lands at 1.5%, a California employer pays an extra $105 per employee earning $7,000 or more ($7,000 x 1.5%). A 20-person team would owe $2,100 more than the 0.6% rate suggests. If the 5.3% figure applies instead, the extra is $7,000 x 5.3% = $371 per employee. The extra amount is not deposited during the year. It is paid with Form 940 for 2026, due February 1, 2027.

What federal payroll taxes cost you per employee

The employer side of federal payroll tax is about 7.7% of pay for most salaries. It drops above the Social Security wage base because only Medicare keeps going. This table uses the 0.6% FUTA rate; add $105 per employee in California if the 1.5% credit reduction is confirmed.

Federal taxes are only part of the bill. A real hire also carries SUTA, workers comp, any state paid leave premium, benefits and your payroll provider's fee. The employer payroll tax calculator adds those lines for any state, and what payroll services cost covers the provider side.

SUTA wage base 2026: the state side

Every state also charges unemployment tax on a wage base it sets. For 2026 the bases run from $7,000 (California, Florida, Arkansas, Tennessee and Louisiana) to $78,200 in Washington. New employer rates run from 1.0% in states such as North Carolina, Delaware and Iowa to 4.1% in New York. A few states, including Alaska, New Jersey and Pennsylvania, also take a small unemployment contribution from the employee.

All 50 states and DC are in the SUTA rates by state table, with lowest and highest experience rates and the surcharges states add.

Withholding rates and reporting thresholds for 2026

The higher 1099-NEC threshold matters most if you pay many small contractors. Our W-2 vs 1099 guide covers the classification tests that decide whether someone is a contractor at all, and the nanny payroll comparison covers household employers.

2026 retirement, HSA and QSEHRA limits

For plan costs, see small business 401(k) providers compared. If you reimburse premiums instead of offering a group plan, the QSEHRA guide and ICHRA guide explain the caps and class rules.

Deposit schedules: when the money is due

Your deposit schedule for Social Security, Medicare and withheld income tax depends on how much tax you reported in the lookback period. For 2026 that period is July 1, 2024 to June 30, 2025. For 2027 it is July 1, 2025 to June 30, 2026.

• $50,000 or less in the lookback period: monthly depositor. Deposit by the 15th of the following month.
• More than $50,000: semiweekly depositor. Wednesday, Thursday or Friday paydays are due the next Wednesday. Saturday through Tuesday paydays are due the next Friday.
• $100,000 next-day rule: if you pile up $100,000 or more of tax on any day, deposit by the next business day. You then become a semiweekly depositor for the rest of the year and the next year.
• Under $2,500 for the quarter: you may pay with a timely filed Form 941 instead of depositing.
• FUTA: deposit when your liability for the quarter goes over $500, by the last day of the month after the quarter ends. Smaller amounts roll into the next quarter.

Source: IRS Topic 757 (last reviewed Oct 14, 2026). Late deposits carry penalties, and buyers report providers that missed them. Our best payroll software ranking compares each provider's tax filing guarantee and what it excludes.

Payroll filing deadlines for 2026 and 2027

W-2s have no automatic extension. A 30-day extension to file with SSA (Form 8809) is granted only in extraordinary cases, and you must e-file once you have 10 or more information returns in total. The payroll year-end checklist lists what to reconcile before January.

What is already known about 2027

• Social Security wage base rises to $192,300 (SSA, certified Oct 14, 2026). Rates stay 6.2% and 1.45%.
• The 1099-NEC threshold of $2,000 may be adjusted for inflation starting in 2027 (IRS 1099 instructions).
• States that have published 2027 SUTA wage bases: New Jersey $46,400, Nevada $45,400, Wyoming $34,900, Wisconsin $14,000 and Pennsylvania $10,000 (unchanged). Most states publish in November and December.
• The final 2026 FUTA credit reduction list arrives after November 10, 2026 and affects the Form 940 due February 1, 2027.
• Thirteen states have announced 2027 minimum wage increases, including California ($17.40), Washington ($17.73) and Connecticut ($17.48).

We recheck these pages when the agencies publish and update the date at the top of this page.

Common payroll tax mistakes with these numbers

1. Using 0.6% FUTA in California. The 2026 potential credit reduction is 1.5%, which takes California FUTA from $42 to $147 per employee.
2. Matching the Additional Medicare Tax. The 0.9% is withheld from the employee only. Employers do not pay a matching 0.9%.
3. Stopping Social Security at the wrong number. The 2026 base is $184,500. Using a stale base under-withholds or over-withholds for high earners.
4. Filing 1099-NECs at $600 for 2026 payments. The threshold is now $2,000. You may still file below it, but you are not required to.
5. Missing a quarterly state wage report after switching providers. One business owner reported their unemployment rate went from 0.8% to 12.75% after a switch (Hacker News, Aug 2026). File zero-wage reports for any quarter you had an account open.