Budget and Pay Your Employer Payroll Taxes
Employer payroll taxes add about 10 to 15 percent to the cost of gross wages. That can be a surprise when you first hire an employee, but it’s crucial to budget for them – and pay them. The federal government allows almost no leeway on payroll taxes that aren’t filed or paid. And the state of Washington also has stiff penalties for delinquent filers.
Employer payroll taxes in 2026 consist of mandatory contributions for Social Security (6.2%), Medicare (1.45%), Federal Unemployment (FUTA, generally 0.6%), and state-specific taxes (SUTA). Employers must match the 7.65% FICA rate (Social Security + Medicare) withheld from employees and pay FUTA on the first $7,000 of employee wages.
Federal Employer Payroll Taxes
The federal government requires employers to match employees’ contributions to FICA, which consists of:
- Social Security tax – 6.2 percent on wages up to a 2026 maximum of $184,500.
- Medicare – 1.45 percent on all wages; an additional 0.9 percent applies for employees earning over $200,000 (withheld from employee, not matched by employer).
There is also FUTA, or federal unemployment tax. The tax rate is 6.0 percent on the first $7,000 of each employee’s annual wages, but employers in Washington state (and many others) receive a credit up to 5.4 percent, reducing the effective rate to 0.6 percent.
Employers use the Electronic Federal Tax Payment System (EFTPS) to deposit taxes on a semi-weekly or monthly schedule. Every quarter, employers file Form 941 (Quarterly Federal Tax Return) to report FICA and withheld income taxes.
Washington State Employer Payroll Taxes
These are the key payroll taxes employers pay in Washington state:
- State Unemployment Insurance (SUI) – Rates for 2026 range from 0.27 percent to 6.02% percent on a taxable wage base of $78,200 per employee. New employers typically pay an average rate of 1 to 5.4 percent.
- Workers’ Compensation – Paid to the Department of Labor & Industries (L&I), rates vary based on the job classification and risk.
- Paid Family and Medical Leave (PFML) – For 2026, the total premium is 0.8 percent of wages. Employers with 50 or more employees must pay a portion, while all employers must withhold the employee share (roughly 71 percent of the total).
- WA Cares Fund (Long-Term Care) – Employers must withhold 0.58% of employee gross wages, with no wage cap.
Links
Washington state offers an Employer’s Guide to Paying Taxes.
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