Complete Guide to Employer Statutory Costs in the United States (2025)

Social Security tax is 6.2% each for employer and employee on wages up to USD 168,600 for 2024 (the wage base is adjusted annually). Medicare is 1.45% each with no wage cap. Together, FICA costs the employer 7.65% of wages up to the Social Security cap, and 1.45% on wages above it. There is no additional Medicare tax on the employer side (the 0.9% surtax applies only to employees earning above USD 200,000).

FUTA (Federal Unemployment Tax) is 6.0% on the first USD 7,000 per employee per year. With the maximum state tax credit of 5.4%, the effective FUTA rate is typically 0.6%. SUTA (State Unemployment Tax) rates vary widely by state and employer experience rating, ranging from 0.5% to 5.4%+ on state-defined wage bases. A typical new employer rate is approximately 2.7%.

Workers compensation is state-mandated insurance covering workplace injuries. Premiums vary by state, industry, and claims history, typically ranging from 0.5% to 3% of payroll. Texas is the only state where coverage is technically voluntary, though most employers carry it. Workers compensation is 100% employer-funded.

Total employer statutory costs in the US typically range from 10% to 14% of gross salary. This includes FICA at 7.65% (up to the SS cap), FUTA at 0.6%, SUTA at approximately 2.7% (on the state wage base), and workers compensation at 1-2%. Employers should also budget for state-specific obligations such as state disability insurance (CA, NY, NJ, HI, RI), paid family leave programmes, and local payroll taxes. The US does not mandate employer-provided health insurance, but the ACA requires applicable large employers (50+ full-time employees) to offer affordable coverage or face penalties.