$4,590 comes out of pay; another $4,590 is paid on top and you never see it
On a $60,000 salary the employee contributes $4,590 in Social Security and Medicare and the employer contributes the same again. Only the first half appears on the payslip. The second is a real cost of employing you — the total cost to the employer is $64,590, not $60,000 — and most employees never encounter the figure.
Economists generally argue the employer half is borne by the worker regardless, in the form of wages that are lower than they would otherwise be. Whether or not that holds in full, the practical point stands: the true tax wedge on employment is the sum of both halves, and quoting only the employee side understates it by half.
There is no employer, so both halves land on the same person
Someone self-employed pays both halves themselves. On the same $60,000 of profit the contribution is the full 15.3% — about $9,180 before the base adjustment — rather than $4,590, which is why moving from employment to self-employment at an unchanged headline income produces a substantially lower net figure.
Most systems soften this. The self-employed typically deduct half the contribution when computing income tax, and the base is often slightly reduced before the rate applies. The relief rarely offsets the full doubling, and pricing self-employed work at an employed salary without accounting for it is a common and expensive mistake.
Social contributions usually cap; health contributions usually do not
Most systems apply the social security portion only up to an annual ceiling, above which the marginal payroll rate drops sharply. The health or medicare portion generally has no ceiling and often gains an additional surcharge above a high threshold, so the combined rate falls at one point and rises again at another.
This calculator stops the social rate at the wage cap you enter — $184,500, the 2026 US figure, by default — so above it only the medicare rate continues. It does not add the US 0.9% Additional Medicare Tax on employee wages above $200,000, so for a very high salary the employee share here is slightly low.
Thresholds, caps, surcharges and every jurisdiction-specific rule
Rates, ceilings and the definition of qualifying pay differ by country and frequently by region. Some systems exempt an initial band entirely; others apply different rates to different categories of worker; several add employer-only levies that appear in none of these fields.
Benefits in kind, bonuses and equity compensation may be treated differently again, and pension contributions often reduce the base before the rate applies. Use this to understand the structure — two halves, a ceiling, and a total cost above the salary — and the official schedule for figures you will act on.
Frequently Asked Questions
What is the difference between payroll tax and income tax?
Payroll tax funds social-security and health programmes and is often split between worker and employer, while income tax is levied on overall income at progressive rates. They are calculated separately, and this tool covers only payroll tax.
Who pays payroll tax — the employee or the employer?
Both, in most systems. The employee’s share is deducted from pay, and the employer pays a matching or separate share as an on-cost. The combined amount is what funds the programmes.
Why apply medicare to both sides?
In several systems a medicare-style levy is matched by employer and employee, so the same rate is applied to each. If your system differs, adjust the rates to reflect who pays what.
Can I use this outside the US?
Yes, by replacing the defaults: the split into an employee and an employer share, each with a capped and an uncapped part, fits many systems. Enter your system’s rates and cap and verify them with the official authority.
Sources & References
Figures on this page are checked against primary, authoritative sources. Links open in a new tab.
The same medicare-style rate is applied to both the employee and employer sides.
The social rate stops at the wage cap you enter (the 2026 US figure by default); the medicare rate applies to the whole salary.
Net pay reflects only the employee payroll tax and excludes income tax and other deductions.
Results are estimates for general and educational use; the defaults are the 2026 US FICA rates.
Where it stops
Payroll tax rates, wage caps, and the programmes covered vary by country, region, and tax year.
The US Social Security wage base is $184,500 for 2026 and is applied by default; Medicare (1.45% each side) has no wage cap. Other years and systems need their own figures — verify them with the IRS or the relevant authority.
This tool excludes income tax, additional surcharges, and benefits, so net pay is not full take-home pay.
The 0.9% Additional Medicare Tax on US wages above $200,000 and other high-earner levies are not modelled.
This tool does not run payroll, file returns, or confirm compliance.
Related Calculators
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Overtime TaxWhat overtime actually nets after tax, from the hourly rate, the multiplier and the marginal rate.
Salary TDSMonthly salary TDS from your estimated annual tax, adjusted for what has already been deducted.
Income TaxUS federal income tax for 2026 or 2025 on the IRS brackets: every filing status, deductions and credits, effective and marginal rate, and your refund or amount owed.
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Tax rules vary by country, state, tax year, filing status, income type, deductions, and exemptions. This calculator is educational and uses the values you enter. Always verify final tax treatment with official sources or a qualified tax professional.
Published the calculator with its formula, worked example, assumptions, limitations and a bespoke guide, and added an automated formula test suite covering it.
Verified that the employer half is reported separately and added to total employment cost, since it never appears on a payslip.
Replaced the placeholder 7.5% social rates with the 2026 US FICA rates (6.2% Social Security and 1.45% Medicare on each side) and applied the $184,500 Social Security wage base the page already cited from IRS Topic 751; the $60,000 example is now $4,590 a side, $9,180 in total.
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