if i have an employee how much should i expect to pay in payroll taxes
All states require that you purchase workers' compensation insurance once you have someone on payroll. Rates vary by state, but a 2014 report [PDF] from the state of Oregon noted that the median rate is around $1.85 per $100 of payroll, or 1.85 percent of an employeeâs salary. If youâre in California, you could pay up to 3.5 percent of total wages to cover workers' compensation.
The true cost of paying each of your employees is significantly higher than their hourly rate. Even if you donât offer benefits or paid vacation, there are some unavoidable taxes and expenses youâll incur having employees on your payroll.