Every paycheck carries two sets of taxes: the ones printed on the stub, and a nearly identical set the employer pays that the employee never sees. Get them straight and payroll stops being mysterious. The employee side is FICA plus income tax withholding; the employer side is a matching FICA payment plus unemployment taxes. Here's the whole system with a worked example.
Three deductions, in order of predictability:
Here's the full calculation for a single filer paid biweekly, using the 2024 standard deduction of $14,600, a 5% state tax, and no 401(k), the same math our payroll calculator runs. Taxable income is $60,000 − $14,600 = $45,400, which spans the 10% and 12% federal brackets:
| Line | Annual | Per biweekly check |
|---|---|---|
| Gross pay | $60,000.00 | $2,307.69 |
| Federal income tax | $5,216.00 | $200.62 |
| FICA (7.65%) | $4,590.00 | $176.54 |
| State tax (5%) | $3,000.00 | $115.38 |
| Net pay | $47,194.00 | $1,815.15 |
Worth pausing on: FICA ($4,590) is nearly as large as federal income tax ($5,216) at this salary. For roughly half of American workers, payroll tax is the bigger federal bite, which is why "I barely pay income tax" and "taxes ate my paycheck" are both true.
Salary, pay frequency, 401(k) percentage, and state rate in; a full paycheck breakdown out.
Payroll Calculator →This is the half employees rarely see. For every worker, the employer separately owes:
| Salary | Employer FICA match | FUTA (after credit) | Minimum true cost |
|---|---|---|---|
| $50,000 | $3,825.00 | $42 | $53,867.00 |
| $75,000 | $5,737.50 | $42 | $80,779.50 |
| $100,000 | $7,650.00 | $42 | $107,692.00 |
And that's the floor: SUTA, workers' comp premiums (see our workers' comp cost guide), and benefits all stack on top. A useful rule of thumb is that an employee's true cost runs 1.25 to 1.4 times salary once everything is counted.
Pre-tax 401(k) contributions reduce income tax but not FICA. Defer 5% of a $60,000 salary ($3,000) and federal taxable income drops to $42,400, saving $360 a year at the 12% marginal rate, plus $150 of the 5% state tax where 401(k) money is state-deductible. But you'll still pay the full $4,590 of FICA, because Social Security and Medicare are levied on gross wages before the deferral. Plenty of people expect a 5% contribution to shrink their check by 5%; it actually shrinks it by less, about 4.1% in this example, which makes contributing cheaper than it looks.
Employee-side payroll tax is simple arithmetic: 7.65% FICA plus bracket-based withholding on what's left after pre-tax deductions. The employer mirrors the FICA and adds unemployment taxes that never appear on a pay stub. If you're an employee, the interesting number is your net percentage; on $60,000 here, take-home is about 78.7% of gross. If you're hiring, budget salary times 1.08 as the tax-only floor and more like 1.3 all-in. To see how the take-home changes across salaries or states, the salary calculator handles the employee view, and the income tax calculator isolates the federal piece.
7.65% of gross wages for the employee: 6.2% for Social Security plus 1.45% for Medicare. The employer pays a matching 7.65%, so the government actually collects 15.3% on most wages. Social Security's 6.2% stops at the annual wage base ($168,600 in 2024, $176,100 in 2025); Medicare's 1.45% has no cap, and an extra 0.9% employee-side surtax kicks in on wages above $200,000.
No, only FICA. The employer matches your 6.2% Social Security and 1.45% Medicare dollar for dollar. Federal and state income tax withholding comes entirely out of your pay; the employer just forwards it. FUTA and SUTA unemployment taxes run the other way: employers pay those alone in almost every state.
It isn't, exactly. The IRS lets employers withhold a flat 22% on supplemental wages like bonuses (for amounts up to $1 million) instead of running them through the regular withholding tables. Your actual tax on the bonus is whatever your real bracket says when you file, so the flat withholding trues up as a larger refund or balance due in April.
State unemployment tax, paid by employers on a state-set wage base. New employers get a standard rate, often 2-4%, and after a few years the state assigns an experience rating: lay off a lot of people whose claims hit your account and your rate climbs; keep a stable workforce and it falls. Paying SUTA on time also earns the credit that cuts federal FUTA from 6.0% to 0.6%.