Payroll Tax Rates 2026: Every Rate, Cap, and Change
Payroll tax rates 2026: 6.2% Social Security on the first $184,500, 1.45% Medicare, 0.6% net FUTA, plus SUTA. Every employee and employer rate in one table.
This article is for general information, not tax or legal advice. Rates, wage bases, and state unemployment figures change, and some 2026 numbers below are still projections. Verify current figures with the IRS, the SSA, and your state agency, or talk to a payroll professional before filing.
No federal payroll tax rate changed for 2026. The caps did. The Social Security wage base moved from $176,100 in 2025 to $184,500 in 2026, which is why your first 2026 payroll run looked bigger even though every percentage stayed put.
Below is the full rate card, organized by who actually pays each tax, followed by the 2025 comparison, the employer-only taxes, and the one 2026 change most rate roundups skip.
The 2026 payroll tax rate table
Payroll taxes split into three groups: taxes the employee pays, taxes the employer pays, and taxes both pay. Every federal one sits in the table below.
| Tax | Employee rate | Employer rate | 2026 wage base or threshold |
|---|---|---|---|
| Social Security (OASDI) | 6.2% | 6.2% | First $184,500 of wages |
| Medicare | 1.45% | 1.45% | No cap, all wages |
| Additional Medicare | 0.9% | None | Wages over $200,000 |
| Federal income tax | Per W-4 and Pub. 15-T | None | Bracket-driven, not flat |
| FUTA | None | 0.6% net (6.0% less credit) | First $7,000 of wages |
| SUTA | None (most states) | Set by your state | State-specific wage base |
Combined FICA is 7.65% from each side, or 15.3% total on wages under the Social Security cap. That is the number most people mean when they say “payroll tax.”
The row worth staring at is the third one. The 0.9% Additional Medicare Tax is withheld from the employee once their year-to-date wages cross $200,000, and the employer has to withhold it, but the employer does not match it. Paying a matching 0.9% is one of the most common overpayments small employers make. The employer FICA match guide walks through what you do and do not match.
Two more notes on that table. A handful of states (Alaska, New Jersey, and Pennsylvania) withhold a small SUTA contribution from employees, so “none” is a general rule rather than a universal one. And self-employed people pay both halves at 15.3% on 92.35% of net earnings, with the 12.4% Social Security portion capped at the same $184,500.
What changed from 2025 (and what didn’t)
Start with what did not change, because it is almost everything: 6.2%, 1.45%, 0.9%, 6.0%, 0.6%, and the 22% supplemental rate are all identical to 2025. If a page tells you your payroll tax rate went up this year, it is wrong.
The caps and the limits moved.
| Item | 2025 | 2026 | Change |
|---|---|---|---|
| Social Security wage base | $176,100 | $184,500 | +$8,400 (4.8%) |
| Max employee Social Security tax | $10,918.20 | $11,439.00 | +$520.80 |
| Standard deduction, single | $15,750 | $16,100 | +$350 |
| Standard deduction, MFJ | $31,500 | $32,200 | +$700 |
| 401(k) elective deferral | $23,500 | $24,500 | +$1,000 |
| 401(k) catch-up, age 50+ | $7,500 | $8,000 | +$500 |
| IRA contribution | $7,000 | $7,500 | +$500 |
| HSA, individual | $4,300 | $4,400 | +$100 |
| HSA, family | $8,550 | $8,750 | +$200 |
| Health FSA | $3,300 | $3,400 | +$100 |
The concrete effect for a high earner: anyone whose wages clear $184,500 pays $520.80 more in Social Security tax in 2026 than in 2025. Their employer pays the same $520.80 increase. For a business with ten employees above the cap, that is $5,208 in new employer tax with no rate change at all. When Social Security tax stops covers what that looks like on the paycheck where the cap lands.
One new rule to watch in 2026: catch-up contributions to an employer plan must be made on a Roth (after-tax) basis if the employee earned more than $150,000 in the prior year. That is a payroll setup change, not a rate change, but it will break a deduction code that has worked for years. See how 401(k) contributions affect take-home pay for how pre-tax and Roth deferrals hit withholding differently.
Social Security benefits also rose 2.8% under the 2026 COLA. Same announcement, different side of the ledger.
Employer-only taxes: FUTA, SUTA, and the credit reduction
These two never come out of the employee’s check. They are pure employer cost, and they are the part of the rate card that varies most.
FUTA is 6.0% on the first $7,000 of each employee’s wages. Pay your state unemployment tax in full and on time and you claim a 5.4% credit, which drops the effective rate to 0.6%. That is $42 per employee per year, and most employees max it out in the first quarter. Topic No. 759 has the IRS version.
SUTA has no single rate. Your state assigns one based on your industry and your unemployment claims history, and each state sets its own wage base. Those bases range from $7,000 in California, Florida, and Tennessee up to $78,200 in Washington for 2026. Most new employers land somewhere near 2.7%. Our SUTA explainer covers experience rating and how to read your annual rate notice.
Now the wrinkle. California and the US Virgin Islands are on the Department of Labor’s potential 2026 FUTA credit reduction list, which means employers there would lose part of the 5.4% credit and owe more than $42 per head.
California’s projected 2026 reduction is 1.5%, up from a final 1.2% for 2025. It could go higher: a BCR add-on of roughly 3.8% would push the total near 5.3% unless the state secures a waiver. The USVI projection is 4.8%, after a final 4.5% for 2025. New York fell off the list this year.
Every one of those numbers is a projection. The DOL does not make the determination until after November 10, 2026, and you report the final figure on Schedule A of Form 940. Any page presenting the 1.5% as settled is getting ahead of the DOL. The 2026 FUTA credit reduction post tracks the state list and the math; FUTA explained covers the base mechanics.
Federal income tax withholding is not a flat rate
FICA and FUTA are flat percentages. Federal income tax withholding is not, and treating it like one is where hand-built payroll spreadsheets usually go wrong.
Withholding runs off the employee’s Form W-4 and the percentage-method tables in Publication 15-T. Two employees earning identical wages can have very different withholding depending on filing status, dependents, and other-income entries. There is no “the” income tax rate for a paycheck. If you want the employee-side answer in dollars, the salary to paycheck calculator runs it per pay period.
Here are the 2026 brackets, which set the underlying liability the withholding tables approximate.
| Rate | Single | Married filing jointly | Head of household |
|---|---|---|---|
| 10% | $0–$12,400 | $0–$24,800 | $0–$17,700 |
| 12% | $12,400–$50,400 | $24,800–$100,800 | $17,700–$67,450 |
| 22% | $50,400–$105,700 | $100,800–$211,400 | $67,450–$105,700 |
| 24% | $105,700–$201,775 | $211,400–$403,550 | $105,700–$201,750 |
| 32% | $201,775–$256,225 | $403,550–$512,450 | $201,750–$256,200 |
| 35% | $256,225–$640,600 | $512,450–$768,700 | $256,200–$640,600 |
| 37% | $640,600+ | $768,700+ | $640,600+ |
Married filing separately uses the Single columns through the 32% bracket, then breaks: 35% runs $256,225 to $384,350, and 37% starts at $384,350.
Watch the head of household column at the 32% and 35% rows. Those floors are $201,750 and $256,200, which is $25 below the Single figures in both cases. It is a tiny gap that produces a real error if you copy the Single column across, and it survives year after year because it looks like a typo.
The 2026 standard deduction is $16,100 for single filers, $32,200 for married filing jointly, $24,150 for head of household, and $16,100 for married filing separately.
Supplemental wages do get a flat rate. Bonuses, commissions, severance, and similar payments are withheld at 22% under the percentage method, up to $1,000,000 of supplemental wages for the year. Anything above $1,000,000 is withheld at 37%, and that part is not optional. If an employee has ever asked why their bonus felt shredded, this post is the answer. For the mechanics of regular withholding, see how federal withholding is calculated.
”No tax on tips” and “no tax on overtime” do not change your withholding
Nothing else about 2026 payroll gets misread this often, so I will be blunt about it.
The One Big Beautiful Bill Act created two temporary above-the-line deductions for tax years 2025 through 2028. Both are claimed on the employee’s Form 1040 at filing time. Neither one is an exemption you apply at the register or switch on in your payroll software.
- Tips: deduction of up to $25,000, phasing out from $150,000 MAGI (single) or $300,000 (married filing jointly).
- Overtime: deduction of up to $12,500 (single) or $25,000 (married filing jointly), with the same phase-out floors.
Social Security and Medicare are untouched by both provisions. FICA still comes out of every tip and every overtime dollar, at the same 6.2% and 1.45%, and the employer still matches. Federal income tax is still withheld too. The deduction shows up when the return is filed, as a refund or a smaller balance due.
Also, “qualified overtime” is narrower than most people assume. Only FLSA-mandated overtime counts, and only the premium half of it. Time-and-a-half pay contributes the extra 0.5, not the full 1.5.
What did change for payroll in 2026 is reporting. Form W-2 adds Box 12 code TP for qualified cash tips and code TT for qualified overtime, plus Box 14b for Treasury Tipped Occupation Codes (up to two). The 2026 Form W-4 was revised with a tips and overtime worksheet so employees can reflect the deduction in their withholding during the year instead of waiting for the refund. If you employ tipped or hourly overtime staff, your payroll system needs to track those amounts separately starting now, not in January. The W-4 withholding calculator is a decent place to test what a revised W-4 does to a check.
What a 2026 employee actually costs
Rates are abstract, so here is one employee, all in.
Take a salaried worker at $60,000 in a state with a 2.7% SUTA rate and a $7,000 wage base, with the employer in good standing for the full FUTA credit.
| Employer tax | Calculation | Amount |
|---|---|---|
| Social Security | $60,000 × 6.2% | $3,720 |
| Medicare | $60,000 × 1.45% | $870 |
| FUTA | $7,000 × 0.6% | $42 |
| SUTA | $7,000 × 2.7% | $189 |
| Total | $4,821 |
That is roughly 8.0% on top of the salary, before a dollar of benefits, workers’ comp, or equipment. The employee separately has $3,720 and $870 withheld from their own pay, plus federal income tax per their W-4.
Now push the same worker to $200,000 and the shape changes. Social Security caps at $11,439. Medicare keeps running, so it lands at $2,900. FUTA and SUTA are identical, $42 and $189, because both wage bases were exhausted in the first few weeks. Total employer cost: $14,570, or about 7.3% of salary. The percentage falls as pay rises, which is why the unemployment taxes matter far more for a team of part-timers than for a team of engineers.
Arithmetic like that takes a minute; the year-to-date tracking underneath it is where payroll actually breaks. Every one of those caps is per employee, per calendar year, and each stops mid-pay-period on an exact dollar. Start using a new system in July and every one of those counters has to be seeded with what you have already withheld or you will double-tax someone. WorkLogs44 keeps per-employee YTD figures for FICA, FUTA, and SUTA precisely so a mid-year start truncates the wage bases in the right place, across a whole team at once.
For a single scenario, the employer cost calculator and the SUTA and FUTA calculator will do this in a browser. True cost of an employee extends the same example past taxes into benefits and overhead.
Frequently Asked Questions
What is the payroll tax rate for 2026?
7.65% from the employee and 7.65% from the employer: 6.2% Social Security on the first $184,500 of wages plus 1.45% Medicare on all wages. Employers also pay FUTA and state unemployment tax on top of that.
Did payroll tax rates go up in 2026?
No rate changed. The Social Security wage base rose from $176,100 in 2025 to $184,500 in 2026, so anyone earning above the old cap pays up to $520.80 more Social Security tax, and their employer pays the same increase.
What is the Social Security wage base for 2026?
$184,500. Once an employee's year-to-date wages hit that figure, Social Security withholding stops for the rest of the year. Medicare keeps going with no cap.
How much payroll tax does an employer pay per employee in 2026?
7.65% in FICA, plus $42 in FUTA at the standard 0.6% net rate, plus state unemployment tax. For a $60,000 employee in a 2.7% SUTA state that is roughly $4,821, about 8% on top of salary.
Does the employer match the 0.9% Additional Medicare Tax?
No. The employer must withhold the extra 0.9% once an employee's wages pass $200,000 in a year, but there is no employer match on that portion.
What is the FUTA rate for 2026?
6.0% on the first $7,000 of each employee's wages, reduced to 0.6% by the 5.4% credit for paying state unemployment tax in full and on time. Employers in credit reduction states pay more.
Is overtime and tip income really tax-free in 2026?
Not for payroll purposes. Social Security, Medicare, and federal income tax are still withheld from every tip and overtime dollar. The OBBB deductions, up to $25,000 for tips and $12,500 or $25,000 for overtime, are claimed on the tax return.