SUTA + FUTA Employer Unemployment Tax Calculator 2026
Calculate your 2026 federal FUTA + state SUTA unemployment tax bill. Enter total wages, employees, state, and SUTA rate — get FUTA gross 6.0%, the 5.4% state credit, the effective 0.6% federal rate, plus your full state unemployment tax. Covers the eight largest US states (CA, TX, FL, NY, IL, WA, PA, OH). Free, private, runs entirely in your browser.
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Source: IRS Form 940 (FUTA) + U.S. DOL state SUTA agency directory. Last updated: May 3, 2026.
What Are FUTA and SUTA Employer Unemployment Taxes?
FUTA (Federal Unemployment Tax Act) and SUTA (State Unemployment Tax Act) are payroll taxes paid entirely by employers — not withheld from employee paychecks — to fund the joint federal-state unemployment insurance system. Both apply to wages up to a per-employee wage base, and timely SUTA payment unlocks a large FUTA credit. Source: IRS Form 940 and U.S. Department of Labor (oui.doleta.gov). Last updated: May 3, 2026.
For 2026 the federal FUTA wage base remains $7,000 per employee per year and the gross rate is 6.0%. Employers who pay state SUTA on time and in full receive a 5.4% credit, dropping the effective FUTA rate to 0.6% — that is just $42 per employee per year. The combined FUTA + SUTA is reported annually on IRS Form 940 (federal) and quarterly state wage reports.
How the FUTA Credit Works
The FUTA credit is the single biggest lever in your unemployment tax bill. If you pay state SUTA timely (by the federal Form 940 due date) and your state is not a credit-reduction state, you claim the full 5.4% credit and pay only $42/employee/year in federal tax. If you skip or delay SUTA, you owe the full 6.0% rate ($420 per employee — a 10× swing). Credit-reduction states (states that have not repaid federal unemployment loans within the deadline) lose 0.3% of credit per delinquent year, raising the effective FUTA rate by that increment. California was a credit-reduction state for over a decade until repaying its loan; the IRS publishes the current credit-reduction list each November on Schedule A of Form 940.
State SUTA Wage Bases and Rates Vary Widely
Unlike FUTA's flat $7,000 base, state SUTA wage bases range from $7,000 (CA, FL, AZ) up to over $72,000 (WA in 2026). Each employer is assigned an experience-rated SUTA rate that reflects the unemployment claims charged to its account — new employers pay a state default rate (typically 2.7% to 3.95%), while established employers can fall as low as 0.1% with a clean claim history or rise above 6% with frequent claims. This calculator covers the eight most populous states (CA, TX, FL, NY, IL, WA, PA, OH) with 2026 wage base defaults; you can override any value if your state assigned you a different rate. Verify your assigned rate on your state agency rate-determination notice mailed annually each November or December.
Common Compliance Mistakes to Avoid
Three errors cost employers thousands every year. First, missing the Form 940 deadline (January 31 for the prior tax year) can void your 5.4% credit retroactively. Second, misclassifying employees as 1099 contractors when the IRS or state agency disagrees triggers back-FUTA, back-SUTA, plus penalties and interest. Third, paying SUTA in a state where the work was not performed — an issue for remote employees crossing state lines — can result in double SUTA assessments. Always run wages through the SUTA wage base for the state where each employee actually performs work, and reconcile state and federal returns before filing Form 940.
Frequently Asked Questions
What is the difference between FUTA and SUTA?
FUTA is the federal unemployment tax under the Federal Unemployment Tax Act — paid entirely by the employer, gross rate 6.0% on the first $7,000 of each employee's wages, reported annually on IRS Form 940. SUTA is the state-level unemployment tax assessed by each individual state on its own wage base (ranging from $7,000 in CA/FL to over $72,000 in WA) at a state-assigned experience-rated employer rate. Both fund the joint federal-state unemployment insurance system that pays benefits to laid-off workers.
How do I get the 5.4% FUTA credit?
Pay your state SUTA in full and on time before the federal Form 940 due date (January 31 of the following year). When SUTA is paid timely and your state is not a credit-reduction state, the IRS allows a 5.4% credit against the gross 6.0% FUTA rate, dropping the effective rate to 0.6%. That equals $42 per employee per year on the $7,000 FUTA wage base. Late SUTA forfeits the credit and you owe the full 6.0% ($420 per employee).
What is a FUTA credit-reduction state?
A credit-reduction state is one that borrowed from the federal Unemployment Trust Fund and has not repaid the loan within the federal deadline. Employers in those states lose 0.3% of the FUTA credit per year of delinquency. California was a credit-reduction state for many years until repaying its loan. The IRS publishes the current credit-reduction list each November on Schedule A of Form 940. If your state is on the list, your effective FUTA rate is higher than 0.6%.
Does the SUTA wage base really reach $72,000 in Washington?
Yes. Washington state has one of the highest SUTA taxable wage bases in the United States ($72,800 estimated for 2026), reflecting its higher cost of living and benefit levels. By contrast, California, Florida, Arizona, and several other states keep their SUTA wage base aligned with the federal FUTA $7,000 floor. New York is at $12,800 and Pennsylvania at $10,000 in 2026. Verify the current wage base on your state agency rate-determination notice.
What is an experience-rated SUTA rate?
Each state assigns each employer an annual SUTA rate based on the unemployment benefits charged to that employer's account over the past several years. New employers pay a state default rate (typically 2.7% to 3.95%). Established employers with few claims can fall as low as 0.1%, while employers with many claims can rise above 6%. The state mails a rate-determination notice each November or December for the upcoming calendar year.
Are owners and 1099 contractors subject to FUTA and SUTA?
Generally no. Sole proprietors and partners do not pay FUTA or SUTA on their own self-employment earnings — only on wages paid to W-2 employees. 1099 independent contractors are not employees, so no FUTA or SUTA is due on their compensation. However, misclassifying a worker as 1099 when the IRS or state agency rules they should be W-2 triggers back-FUTA, back-SUTA, plus penalties and interest. S-corp owner-employees who take W-2 wages do owe FUTA and SUTA on those wages.
When is FUTA filed and paid?
FUTA is reported annually on IRS Form 940, due January 31 for the prior calendar year. However, if your FUTA tax exceeds $500 in any quarter, you must deposit it by the last day of the month following the quarter (April 30, July 31, October 31, January 31). Deposits below $500 can be carried forward to the next quarter. SUTA is generally filed quarterly with the state unemployment agency on a state-specific wage report.