Employer tax figures: 4 to copy before you lock the hour

Key takeaways

Write down the four specific numbers that apply to the employer share of a labor hour before you finalize the price.
The federal unemployment tax rate after the maximum credit is 0.6% according to Internal Revenue Service.
The 2026 Social Security wage base limit is $184,500 according to Internal Revenue Service.
The federal unemployment tax applies to the first $7,000 paid to each employee as wages during the year according to Internal Revenue Service.
The Texas page also notes that the 2026 replenishment ratio is 1.20 percent according to Texas Workforce Commission.

Which employer tax figures sit on an hour, in one paragraph

The employer Social Security tax rate is 6.2% according to Internal Revenue Service. The employer Medicare tax rate is 1.45% according to Internal Revenue Service. The FUTA tax rate is 6.0% according to Internal Revenue Service. The FUTA tax applies to the first $7,000 you paid to each employee as wages during the year according to Internal Revenue Service. Write these four figures next to the labor hour you are pricing. See Employer payroll tax rules in 8 sourced rows for more sourced payroll rows.

The federal percents and wage bases

The Internal Revenue Service states that the current tax rate for Social Security is 6.2% for the employer and 6.2% for the employee, or 12.4% total, according to Internal Revenue Service. The same page confirms that the current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total, according to Internal Revenue Service.

The statute text reinforces these percentages. 26 U.S. Code § 3111 imposes an excise tax on every employer equal to 6.2 percent of the wages paid by the employer with respect to employment, according to Legal Information Institute. The same statute imposes an additional excise tax equal to 1.45 percent of the wages paid by the employer with respect to employment, according to Legal Information Institute. These legal definitions match the rates published by the IRS.

Wage limits determine how much of an employee's pay is subject to the Social Security tax. For earnings in 2026, the base limit is $184,500, according to Internal Revenue Service. Employers are responsible for withholding the 0.9% Additional Medicare tax on an individual's wages paid in excess of $200,000 in a calendar year, without regard to filing status, according to Internal Revenue Service.

When pricing a labor hour, copy the 6.2% and 1.45% figures exactly as they appear. Note the $184,500 cap for 2026 Social Security wages. Acknowledge the 0.9% withholding requirement for wages over $200,000. See Markup and margin rates in 4 estimating tools when the hour price also needs markup.

The Texas unemployment figures and the federal cost rule

The federal unemployment tax starts at a rate of 6.0 percent according to Internal Revenue Service. This rate applies to the first $7,000 you paid to each employee as wages during the year according to Internal Revenue Service. The statute imposes an excise tax equal to 6 percent of the total wages paid by the employer during the calendar year with respect to employment according to Legal Information Institute.

Employers who pay into state unemployment funds may receive a credit of up to 5.4 percent of FUTA taxable wages when filing Form 940 according to Internal Revenue Service. If you are entitled to the maximum 5.4 percent credit, the FUTA tax rate after credit is 0.6 percent according to Internal Revenue Service. You are subject to this tax if you paid wages of $1,500 or more to employees in any calendar quarter during 2024 or 2025 according to Internal Revenue Service.

State unemployment rates operate on different bases and formulas. This $9,000 figure is a state-specific wage base and does not replace the federal $7,000 base. Your effective Unemployment Insurance (UI) tax rate in Texas is the sum of five components described in the state guidelines according to Texas Workforce Commission.

One component of the Texas rate calculation involves a replenishment ratio. Your GTR is calculated by multiplying your benefit ratio by the 2026 replenishment ratio of 1.20 percent according to Texas Workforce Commission. This 1.20 percent figure is a ratio used in that state's rate math, not a national unemployment rate or a flat tax percentage applied to all wages.

When pricing a labor hour, copy the federal 0.6 percent net FUTA rate if you qualify for the full credit. For state taxes, do not use the Texas 1.20 percent replenishment ratio as a direct tax rate. Instead, look up the specific effective UI tax rate for your state and apply it to the state's specific wage base. If you are in Texas, apply the calculated rate to the first $9,000 of wages. If you are in another state, find that state's wage base and rate. Leave the state line blank in your estimate until you have the specific figures for the location where the work is performed.

Illustrative example of four lines on one hour

Say you are pricing one hour in 2026 and you want the tax lines on paper before you lock that hour. You draw four lines. The first line is the employer Social Security percent. The second line is the employer Medicare percent. The third line is federal unemployment tax on wages up to 7000. The fourth line is state unemployment. For a Texas job, taxable wages stop at 9000, and that 9000 does not replace the federal 7000 line. The federal unemployment page also names a 1500 quarterly wage figure. This sketch is only a layout. Read each official page and copy the printed percent before you lock the hour.

A filled reference table of tax figures by publisher

The following table lists the employer tax percents, wage bases, and cost rules exactly as printed by each source. Each row identifies the publisher and the specific figure they state. Use these values to populate your labor hour calculation, ensuring you attribute each number to its correct source.

Publisher	Tax or Figure	Percent or Value	Qualifier/Scope
Internal Revenue Service	Social Security employer percent	6.2%	According to Internal Revenue Service, "The current tax rate for Social Security is 6.2% for the employer and 6.2% for the employee, or 12.4% total."
Internal Revenue Service	Medicare employer percent	1.45%	According to Internal Revenue Service, "The current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total."
Internal Revenue Service	Additional Medicare tax	0.9%	According to Internal Revenue Service, "Employers are responsible for withholding the 0.9% Additional Medicare tax on an individual's wages paid in excess of $200,000 in a calendar year, without regard to filing status."
Internal Revenue Service	2026 Social Security wage base	$184,500	According to Internal Revenue Service, "For earnings in 2026, this base limit is $184,500."
Internal Revenue Service	FUTA tax rate	6.0%	According to Internal Revenue Service, "FUTA tax rate: The FUTA tax rate is 6.0%."
Internal Revenue Service	FUTA wage base	$7,000	According to Internal Revenue Service, "The tax applies to the first $7,000 you paid to each employee as wages during the year."
Internal Revenue Service	FUTA credit	Up to 5.4%	According to Internal Revenue Service, "Generally, if you paid into state unemployment funds, you may receive a credit of up to 5.4% of FUTA taxable wages when you file your Form 940."
Internal Revenue Service	FUTA rate after credit	0.6%	According to Internal Revenue Service, "If you're entitled to the maximum 5.4% credit, the FUTA tax rate after credit is 0.6%."
Internal Revenue Service	Quarterly FUTA test	$1,500	According to Internal Revenue Service, "You paid wages of $1,500 or more to employees in any calendar quarter during 2024 or 2025, or"
Legal Information Institute	Employer excise tax (Social Security)	6.2 percent	According to Legal Information Institute, "In addition to other taxes, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to 6.2 percent of the wages (as defined in section 3121(a)) paid by the employer with respect to employment (as defined in section 3121(b))."
Legal Information Institute	Employer excise tax (Medicare)	1.45 percent	According to Legal Information Institute, "In addition to the tax imposed by the preceding subsection, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to 1.45 percent of the wages (as defined in section 3121(a)) paid by the employer with respect to employment (as defined in section 3121(b))."
Legal Information Institute	Employer excise tax (Unemployment)	6 percent	According to Legal Information Institute, "There is hereby imposed on every employer (as defined in section 3306(a)) for each calendar year an excise tax, with respect to having individuals in his employ, equal to 6 percent of the total wages (as defined in section 3306(b)) paid by such employer during the calendar year with respect to employment (as defined in section 3306(c))."
Texas Workforce Commission	Texas unemployment wage base	$9,000	According to Texas Workforce Commission, taxable wages are the sum of the wages you pay up to $9,000 for each employee each year.
Texas Workforce Commission	2026 replenishment ratio	1.20 percent	According to Texas Workforce Commission, "Your GTR is calculated by multiplying your benefit ratio by the 2026 replenishment ratio of 1.20 percent."
Texas Workforce Commission	UI tax rate components	Five components	According to Texas Workforce Commission, "Your effective Unemployment Insurance (UI) tax rate is the sum of five components described below."
Acquisition.gov	Allowable taxes	Federal, State, and local	According to Acquisition.gov, "(1) Federal, State, and local taxes (see part 29), except as otherwise provided in paragraph (b) of this section that are required to be and are paid or accrued in accordance with generally accepted accounting principles."

What these pages do not give you

This figure applies only to Texas state unemployment tax calculations. It is not the federal FUTA wage base. Do not substitute the Texas $9,000 figure for the federal $7,000 base when calculating FUTA liability.

These pages do not provide workers' compensation rates. They do not provide general liability insurance rates. They do not provide overhead percentages. Do not add these costs to the tax figures listed in this guide. The scope here is limited to employer payroll taxes: Social Security, Medicare, FUTA, and state unemployment tax.

Do not construct a sample labor rate in dollars using only these tax figures. The sum of the Social Security percent, the Medicare percent, and the net FUTA percent does not represent the total employer labor burden. A complete labor rate requires additional costs not covered by these specific tax pages. See Check 3 fee caps before adding design profit before design profit joins the hour.

A record of the tax lines on one labor hour

Copy the exact figures from the official pages into your own notes. Do not guess a state rate if the page does not print one. Leave the state line unread until you read that state's specific page.

Line	Tax name	What you copy	Where you read it
Example	One employer tax on the hour	The percent or wage base printed for that tax	The official page that states it

Write the four figures today

Open the federal Social Security and Medicare page, the federal unemployment page, and the state page for the job site. Copy the four employer figures next to the hour. Skip any state percent the page does not print.

Questions about employer taxes on a labor rate

The employer share for Social Security is 6.2% and the employer share for Medicare is 1.45%. According to Internal Revenue Service, "The current tax rate for Social Security is 6.2% for the employer and 6.2% for the employee, or 12.4% total." The same page states, "The current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total." These figures apply to the employer's portion of the payroll tax burden. When you build a labor hour, use these specific percentages for the federal portions of the tax calculation. Do not assume these rates change without checking the current IRS guidance.

The wage base limit for Social Security in 2026 is $184,500. According to Internal Revenue Service, "For earnings in 2026, this base limit is $184,500." This means the 6.2% employer tax applies only to wages up to this amount. Any wages paid above $184,500 in a calendar year are not subject to the Social Security tax. Estimators must track cumulative wages for each employee to determine when the base is reached. If an employee's year-to-date wages exceed this limit, no further Social Security tax is owed for that year.

What is FUTA after the full credit?

The Federal Unemployment Tax Act (FUTA) rate is 0.6% if the employer is entitled to the maximum credit.

What does the Texas page add?

The Texas page adds a wage cap of $9,000 for each employee each year, according to Texas Workforce Commission, and a 2026 replenishment ratio of 1.20 percent. According to Texas Workforce Commission, "Your GTR is calculated by multiplying your benefit ratio by the 2026 replenishment ratio of 1.20 percent." This ratio is part of the state's rate calculation method, not a national standard.

What should not be added to these figures?

Do not add workers' compensation rates, general liability rates, or overhead percentages to these tax figures. The pages cited do not provide these values. Do not claim that the Texas $9,000 wage base is the federal FUTA wage base; according to Internal Revenue Service, "The tax applies to the first $7,000 you paid to each employee as wages during the year." Do not claim that 6.2% plus 1.45% plus 0.6% is every employer's labor burden, as this ignores the state unemployment tax component which varies by state and employer history. Do not add a sample labor rate in dollars, as no such figure is provided in the source pages.