Payroll Taxes

Payroll Tax Rates
Social Security tax rate	4.20%
Medicare tax rate	1.45%
Total payroll taxes	5.65%

If an employee earns $1,000, the payroll taxes are:

Social Security tax	$42.00
Medicare tax	$14.50
Total payroll taxes	$56.50

The employer sends the $56.50 to the federal government.

There is a maximum annual amount of Social Security tax withheld per employee. Social Security taxes are not withheld on amounts over the earnings limit. For 2011, the earnings limit was $106,800, and the maximum Social Security tax was $4,485.60 ($106,800 x 4.2%). There is no limit on the amount of wages subject to Medicare tax.