Payroll Employment Taxes on wages (Federal Insurance Contributions Act – FICA) currently includes a 6.2 % Social Security tax from an employee’s wages and the employer’s share is also 6.2 % (6.2 employee portion + 6.2 employer portion = 12.4 %). Also, a 1.45% Medicare tax is withheld from the employee’s wages and the employer again matches 1.45%. The total of all four portions is 15.3 percent (6.2 + 6.2 + 1.45 + 1.45 = 15.3%).
The other taxes on wages are Federal Unemployment Tax (FUTA – 6% of first $7,000 in income), State Unemployment Tax (SUTA – varies per state – % depends on state & one’s tax bracket), & Workers Compensation (% depends on state and EMR). FUTA, SUTA, and Worker’s Compensation are taxes paid entirely by the employer. Federal, State, City, and School income taxes are paid entirely by the employee. These costs are different for each area but typically range between 15% and 50% of bare labor costs.