Payroll Cost per Employee in Michigan
2026 estimates — total employer cost including taxes and benefits
Min wage in Michigan: $10.56/hr (2025; increasing annually to $12.48 by 2028 under Prop 22) | SUTA: 0.06–10.3% on first $9,500
Calculate Total Payroll Cost in Michigan
Payroll Tax Breakdown — Michigan 2026
| Tax / Cost | Rate / Rule | Annual Amount |
|---|---|---|
| Base salary | Per agreement | $56,100 |
| Social Security (employer) | 6.2% on first $168,600 | $3,478 |
| Medicare (employer) | 1.45% of all wages | $813 |
| FUTA (federal unemployment) | 0.6% on first $7,000 | $42 |
| Michigan SUTA | 0.06–10.3% on first $9,500 | $375 |
| Benefits (health, 401k, etc) | ~18% of salary (typical) | $10,098 |
| Total Employer Cost | $71,285 | |
Based on $56,100 median salary in Michigan. SUTA rate shown is approximate average — actual rate depends on claims history. Additional: Detroit city income tax: 2.4% (city residents), 1.2% (non-residents working in Detroit) — withhold for all Detroit employees.
Payroll Requirements in Michigan
1. Michigan Payroll Tax & Compliance Overview
Michigan payroll has moderate complexity. State income tax is a flat 4.25%. Detroit city employers must additionally withhold Detroit city income tax (2.4% for Detroit residents, 1.2% for non-residents who work in Detroit) — separate registration and filings required. Michigan SUTA rates vary significantly by experience. Michigan workers' comp uses private insurers (not a monopoly state). Michigan's minimum wage increases annually through 2028 under Proposal 22.
2. Top Tips for Michigan Employers
Michigan employers: ensure your payroll system is configured for Detroit city income tax withholding separately from state withholding if you have Detroit-based employees. Track the annual minimum wage update (January 1st each year). Michigan workers' comp can be placed with any licensed carrier — shop competitively to avoid paying more than necessary. Gusto and ADP handle Michigan-specific requirements automatically.
3. Key Michigan Payroll Facts
- Minimum wage: $10.56/hr (2025; increasing annually to $12.48 by 2028 under Prop 22)
- State income tax: 4.25% flat rate
- State unemployment (SUTA): 0.06–10.3% on first $9,500
- Additional: Detroit city income tax: 2.4% (city residents), 1.2% (non-residents working in Detroit) — withhold for all Detroit employees
Run Michigan Payroll Automatically
Automated payroll software handles Michigan tax calculations, filings, and W-2s for $40–$150/month.
Payroll Software Cost Comparison — Michigan 2026
At $5,940/month total employer cost, automating payroll for $56,100 median salary employees costs 27% above base salary. Software adds just 0.1–0.3% but eliminates costly compliance errors.
| Software | Base Price | Per Employee |
|---|---|---|
| Gusto Top pick | $46/mo | +$6/emp/mo |
| QuickBooks Payroll Core | $45/mo | +$6/emp/mo |
| ADP Run Essentials | ~$65/mo | +$4/emp/mo |
| Rippling | $35/mo | +$8/emp/mo |
Prices as of 2026. All four platforms handle Michigan state tax filings automatically. 10-employee team example: Gusto = $106/mo, QuickBooks = $105/mo, ADP ≈ $105/mo, Rippling = $115/mo.
Frequently Asked Questions
Michigan Payroll Summary
- →Avg salary: $56,100/yr
- →Total cost: $71,285/yr
- →Overhead rate: ~27% above salary
- →Min wage: $10.56/hr (2025; increasing annually to $12.48 by 2028 under Prop 22)
- →State income tax: 4.25% flat rate