1. What are FICA, FUTA, and SUTA Taxes?

FICA (Federal Insurance Contributions Act) taxes fund Social Security and Medicare. FUTA (Federal Unemployment Tax Act) and SUTA (State Unemployment Tax Act) taxes fund unemployment compensation programs.

2. How the Calculator Works

The calculator uses these standard formulas:

Where:

• Wages — Employee's gross wages subject to payroll taxes
• 7.65% — Standard FICA rate (6.2% Social Security + 1.45% Medicare)
• 6% — Standard FUTA rate (though credit reductions may apply)
• State Rate — Varies by state (typically 1-10%)

3. Importance of Payroll Tax Calculation

Details: Accurate payroll tax calculation ensures compliance with federal and state regulations, prevents penalties, and helps with budgeting labor costs.

4. Using the Calculator

Tips: Enter gross wages in dollars and your state's unemployment tax rate as a decimal (e.g., 5.4% = 0.054). The calculator will compute all three payroll taxes.

5. Frequently Asked Questions (FAQ)

Q1: Are there wage bases for these taxes?
A: Yes - Social Security (FICA) has a wage base ($147,000 in 2022). Medicare has no wage base. FUTA applies to first $7,000 in wages.

Q2: Do employers and employees both pay FICA?
A: Yes - employers match the employee's 7.65% contribution (total 15.3%).

Q3: Can FUTA rates vary?
A: The standard rate is 6%, but most employers qualify for a 5.4% credit, making the effective rate 0.6%.

Q4: How often are these taxes paid?
A: FICA is paid quarterly or more frequently. FUTA/SUTA are typically paid quarterly.

Q5: Are all wages subject to these taxes?
A: Most cash wages are subject, but some fringe benefits may be exempt. Consult a tax professional for specifics.