By NextBestFitFederal employer health payroll tax (new)
The federal government pays the employer tax on its civilian and military payroll like any employer.
Result
$30.0B
$0.0B → $30.0B
Per resident, per year
$88
÷ 341.1M people
Per household
$227
÷ 132.2M households
How it's calculated
| # | Step | Arithmetic | Value |
|---|---|---|---|
| 1 | Wages & salaries, 2024 (BEA) Sources: BEA via FRED (2025) | $12.39T | |
| 2 | Remove payroll under each employer's $250,000 exemption (6%) | $12,388.0B × (1 − 6%) | $11.64T |
| 3 | Tax at 7.5% | $11,644.7B × 7.5% | $873.4B |
| 4 | Private employers' share of wages | $10,739.0B ÷ ($10,739.0B + $1,887.0B) | 85.05% |
| 5 | Private employers pay | $873.4B × 85.05% | $742.8B |
| 6 | Government employers pay | $873.4B − $742.8B | $130.5B |
| 7 | Federal (23% of government wages) | $130.5B × 23% | $30.0B |
| 8 | State & local | $130.5B − $30.0B | $100.5B |
Inputs used
| Input | Kind | Value |
|---|---|---|
| Wages & salaries, 2024 | data, high confidence | $12.39T |
| Share of total payroll exempted by the $250k exemption | estimate, medium confidence | 6% |
| Payroll exempt per employer | policy, high confidence | $250,000 |
| Employer health payroll tax rate | policy, high confidence | 7.5% |
| Private-industry wages & salaries (Q4 2024 annual rate) | data, high confidence | $10.74T |
| Government wages & salaries (Q4 2024 annual rate) | data, high confidence | $1.89T |
| Federal share of government wages (civilian + military) | estimate, medium confidence | 23% |
Trade-off: A new, visible tax replaces premiums and out-of-pocket costs. It is proportional to income or payroll instead of flat per person.
Sources: CMS Office of the Actuary (2025)