MD · Payroll tax 2026
The true cost of hiring in Maryland
Estimate what a W-2 employee costs in Maryland and compare it with a 1099 contract using sourced 2026 payroll-tax defaults that you can adjust to your assigned rate.
Estimate a Maryland hire
Pre-filled with a 2.6% base new-employer rate. Adjust SUI, salary, benefits, and the 1099 rate to fit your hire.
Results update instantly. Your values stay in this browser.
A W-2 hire in Maryland costs more than salary. Employers pay federal FICA and FUTA plus state unemployment insurance. For 2026, HiringMath uses a 2.6% base new-employer rate on the first $8,500 of wages, producing up to about $221 of state UI tax per worker before experience-rating or account-specific adjustments. Maryland taxes wage income, which creates a withholding obligation but is not an employer-paid tax. Out-of-state construction employers pay 3.3%. The calculator below combines those statutory items with editable benefits, workers' compensation, and overhead, then compares the result with a 1099 contract.
Maryland employer tax facts
| Item | MD |
|---|---|
| Base new-employer SUI rate | 2.6% |
| SUI taxable wage base | $8,500 |
| Federal FICA (employer) | 7.65% |
| FUTA | 0.6% |
| State income tax on wages | Yes |
| Worker classification test | ABC framework |
Extra employer taxes: Out-of-state construction employers pay 3.3%.
Example: a $75,000 hire in Maryland
At a $75,000 base salary with typical benefits, a W-2 employee in Maryland costs an employer $99,301 per year — $24,301 above base pay. An equivalent 1099 contract at $75,000 would cost $24,301 less; the breakeven contract rate is $99,301.
Misclassification risk in Maryland
Test: ABC framework
ABC framework; construction work has additional Workplace Fraud Act requirements.
Penalties by stateCompare nearby rates
Maryland's 2.6% new-employer SUI rate sits near Georgia (2.64%), Indiana (2.5%), Virginia (2.5%), Wisconsin (2.5%). See the full 51-state comparison or the 2026 employer payroll tax reference.
Common questions
Maryland hiring-cost FAQ
What SUI rate does HiringMath use for Maryland?
The calculator starts with a 2.6% base new-employer rate, applied to the first $8,500 of each employee's 2026 wages. Your assigned rate can differ because of industry, surcharges, and claims history, so replace the default with the rate on your state notice when available.
Does Maryland have a state income tax?
Yes. Maryland taxes wage income. Employers withhold it from employee pay, but it does not directly increase the employer's payroll-tax cost.
What should employers know about worker classification in Maryland?
ABC framework; construction work has additional Workplace Fraud Act requirements. This is a planning summary, not legal advice; confirm classification decisions with the relevant agency or counsel.