FUTA SUTA Employer Tax Calculator

FUTA — Federal Unemployment Tax 2026

FUTA rate: 6.0% on first $7,000 of wages per employee = $420 maximum per employee. Credit reduction: states with outstanding federal UI loans face reduced credit, raising effective FUTA rate. 2025 credit reduction states included California (0.6%), New York (0.6%), Virgin Islands (5.0%). Verify your state's 2026 credit reduction status before computing — affects whether your effective FUTA rate is 0.6% or higher.

SUTA — State Unemployment Tax Wage Bases

SUTA wage bases vary wildly. 2026: California $7,000. Florida $7,000. Texas $9,000. New York $12,800. Washington State $72,800 (highest). Hawaii $58,000. SUTA rate depends on employer's 'experience rating' — claims history. New employers get default rate (typically 1-3%); established employers range 0.3-9%+. Aggressive claims = SUTA goes up; clean record = SUTA goes down.

Multi-State Employers and SUTA Allocation

Employee working in multiple states: SUTA generally paid to ONE state under the 'localization of service' test. If services localized in one state, that state collects SUTA. If services in multiple states without localization, use: (1) state with base of operations, (2) state where supervised, (3) state of residence. Misallocation triggers penalties + interest in both states. Critical for remote workers — sourcing rules matter.

Reducing SUTA Costs — Experience Rating Game

SUTA is the largest controllable payroll tax. Strategies: (1) Document all separations carefully — voluntary quits and misconduct disqualify claimants. (2) Respond to every UI claim within statutory window (typically 10 days). (3) Audit claims charged to your account — about 20% are wrongly charged. (4) Consider voluntary contributions if your state allows (paying extra into UI fund can lower future rate).

Sources: IRC §3301-3311 (FUTA), state unemployment statutes, DOL credit reduction list. Last updated: May 2026. Not tax advice.