What is the net FUTA rate for most employers?

0.6% on the first $7,000 of wages per employee (maximum $42/employee/year), assuming the employer paid all state unemployment taxes on time and the state is not a credit reduction state.

What is a credit reduction state?

States that borrowed from the federal unemployment fund and have not repaid it. Employers in these states lose part of the 5.4% SUTA credit, increasing their effective FUTA rate. The IRS publishes updated lists annually.

When is FUTA deposited?

Quarterly if the tax exceeds $500. If the total for the quarter is $500 or less, carry it forward. The annual FUTA return is Form 940, due January 31 following the tax year.

FUTA Federal Unemployment Tax Calculator

Calculate FUTA (Federal Unemployment Tax Act) liability. Gross rate: 6.0% on first $7,000 per employee. Credit of 5.4% for timely SUTA payment reduces effective rate to 0.6% per employee.

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Frequently Asked Questions

What is the net FUTA rate for most employers?

What is a credit reduction state?

When is FUTA deposited?