Decoding the mandatory federal contributions that shape your overhead multiplier. These are predictable lines in your balance sheet, not surprises.
FICA Contributions
FUTA Offsets
Medicare Surcharges
Social Security (6.2%) and Medicare (1.45%) comprise the federal FICA liability. These are matched by employers, creating a dual obligation.
The Federal Unemployment Tax Act (FUTA) applies at 6% on the first $7,000 of wages. State unemployment tax credits can significantly offset this liability.
An additional 0.9% Medicare tax applies to high-income earners. Employers do not match this surcharge but must withhold it accurately.
Payroll compliance is a predictable line in your balance sheet.
Precise forecasting eliminates hidden payroll surprises, turning complex mechanics into transparent cash-flow clarity.
Discretionary vs. Mandatory Overhead
Healthcare & Benefits
Employer contributions to health insurance, dental, and vision plans are significant overhead. These directly impact your loaded cost per employee.
401(k) Matching
Many employers offer 401(k) matching as a key benefit. Accurately model these contributions to understand their impact on your total payroll expenses.
Software & Hardware
Essential tools like payroll platforms, HR software, and employee equipment contribute to the overall cost of a hire. Account for these operational expenses.
Automate compliance and streamline your financial operations with confidence.