SUTA Tax by State 2026 Employer Cost Calculator

SUTA (State Unemployment Tax Act) is paid by employers to fund state unemployment insurance benefits. Each state sets its own wage base and tax rate range. New employers typically pay 2.7% on the first $7,000-$72,800 in wages per employee depending on state. Combined with federal FUTA ($42/employee net), unemployment tax is a real fixed cost of hiring.

How 2026 SUTA Wage Bases Vary by State

The SUTA wage base — the maximum wages per employee subject to state unemployment tax — ranges dramatically. Low: Florida $7,000, Arizona $8,000, Tennessee $7,000, California $7,000, Texas $9,000. Mid: New York $12,800, Illinois $13,590, Georgia $9,500. High: Washington $72,800, Hawaii $61,200, Oregon $54,300, Alaska $51,700, New Jersey $43,300, Idaho $55,300. A 5-employee Washington business pays SUTA on $364,000 in taxable wages vs $35,000 in Florida — a 10x difference. Always verify your state's current base with your state UI agency (links cited in tool output).

Experience Rating Drives Your Actual Rate

Most states start new employers at 2.7% (some 1.0%-3.4%). After 2-3 years, you're assigned an experience rating based on claims charged to your account. Low layoff history = rate as low as 0.1%-0.5%. High layoff history = rate up to 5.4%-13.5% in some states. Keeping turnover low and contesting bogus claims directly saves SUTA cost. Voluntary contributions (paying SUTA early to lower your rate) are allowed in 26 states — usually breakeven only if you expect to grow payroll significantly next year.

FUTA Combined Cost ($42 per Employee)

FUTA is a flat 6.0% federal tax on the first $7,000 of wages per employee. Employers in states that pay SUTA timely get a 5.4% credit, dropping the net FUTA rate to 0.6% = $42 per employee per year. Credit Reduction States (states that borrowed from the federal UI trust fund and haven't repaid) face a partial credit loss — California and New York employers paid extra FUTA in 2023-2024 (verify current year status with DOL). Cite IRS Form 940 instructions and your state UI agency annually.

Common SUTA Mistakes To Avoid

(1) Using prior-year wage base. Wage bases reset every January — Washington's base jumped from $67,600 (2024) to $72,800 (2026). (2) Forgetting state SUTA dumping rules. Buying or restructuring a business may inherit the prior owner's experience rating — moving employees between related entities to chase a lower rate is illegal in all 50 states. (3) Misclassifying employees as 1099 contractors. States aggressively audit — back SUTA plus penalties can dwarf the original savings. (4) Missing credit-reduction state surcharge. Check DOL list each November before filing Form 940.

Last updated May 2026. Sources: state UI agencies + IRS Publication 15 cited per-state in tool output.