Payroll cost calculator The real cost of a hire.
Estimate what a California employee costs your business each year: wages plus employer payroll taxes, unemployment insurance, workers' compensation, and benefits.
How this estimate works
Employer Social Security is 6.2% of wages up to the annual wage base ($184,500 for 2026, $192,300 for 2027). Employer Medicare is 1.45% of all wages.
Federal unemployment (FUTA) is 0.6% of the first $7,000 per employee, plus California's credit reduction, which applies while the state carries an outstanding federal unemployment loan. The 2025 reduction was 1.2%. The 2026 figure is announced in November, so the field is editable.
California unemployment insurance (UI) applies to the first $7,000 of wages. New employers generally start at 3.4%; enter your assigned rate if you have one. The Employment Training Tax (ETT) is 0.1% of the first $7,000.
Workers' compensation depends on job classification and carrier. Enter your rate per $100 of payroll from your policy.
Assumptions and limits
- California SDI is withheld from the employee (1.3% for 2026) and is not an employer cost.
- Local payroll taxes, overtime, paid sick leave, and retirement plan matches are not included unless you add them to benefits.
- 2027 California UI, ETT, and SDI rates are not yet published, so 2026 rates are used for 2027.
- Rates verified October 29, 2026 against IRS, SSA, EDD, DIR, and Department of Labor sources.
An estimate is a starting point
Hiring soon? We set up California payroll correctly from the first check and keep it in step with your books. This calculator is educational and is not tax advice.
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