About the FUTA & SUTA Tax Calculator
This FUTA and SUTA calculator estimates the federal and state unemployment taxes an employer pays on each employee and across the payroll for a year. List each employee’s annual wages, enter your state unemployment (SUTA) tax rate and taxable wage base from your state rate notice, and it applies both wage caps and shows the total, the cost per employee and the share of payroll.
It is meant for small business owners, bookkeepers and payroll staff budgeting employer taxes, pricing a new hire, or checking Form 940 figures. Unemployment taxes are paid only by the employer — nothing is withheld from employee pay, except in the few states that also charge employees.
FUTA is 6.0% of the first $7,000 of each employee’s wages in the calendar year. Employers who pay their state unemployment tax in full and on time receive a credit of up to 5.4%, so the usual net FUTA rate is 0.6% — at most $42 per employee per year. If your state has an outstanding federal unemployment loan it may be a credit reduction state, which raises the net rate; enter that extra percentage from Schedule A (Form 940). SUTA rates and wage bases differ by state and by employer experience, so use the figures your state assigned you.
With the default inputs, the total unemployment tax (year) is $1,419.60. Change any value above to recalculate instantly.
How to use the futa & suta tax calculator
- 1Enter each employee’s expected annual wages, one per line.
- 2Enter your SUTA rate and your state’s taxable wage base from your state rate notice.
- 3Leave the full FUTA credit selected if you pay state unemployment tax on time.
- 4Add any credit reduction percentage if your state is listed on Schedule A (Form 940).
- 5Read the total, the FUTA/SUTA split and the per-employee cost.
Formula and method
Federal unemployment tax is 6.0% of each employee’s first $7,000 of wages in the calendar year. Employers that pay state unemployment contributions in full and on time get a credit of up to 5.4%, leaving a net rate of 0.6%. In a credit reduction state the credit is cut, so the reduction percentage is added back to the 0.6% net rate for wages paid there.
State unemployment tax is your assigned SUTA rate times each employee’s wages up to the state’s taxable wage base. Both caps apply per employee per calendar year, so after an employee passes the wage base no further tax is due on them that year. The calculator assumes all wages are FUTA-taxable and paid in one state.
- $7,000
- FUTA wage base per employee per year
- credit
- Up to 5.4% for state unemployment tax paid (less any credit reduction)
- state wage base
- Annual wages per employee subject to SUTA in your state
Worked examples
Five employees, 2.7% SUTA on a $10,000 wage base
Four employees hit the $7,000 FUTA cap and one earns $5,200, so FUTA wages are $33,200 × 0.6% = $199.20. SUTA wages are 4 × $10,000 + $5,200 = $45,200 × 2.7% = $1,220.40. Total unemployment tax is $1,419.60, about $284 per employee.
Credit reduction state adding 1.2%
With a 1.2% credit reduction the net FUTA rate becomes 0.6% + 1.2% = 1.8%, so FUTA on $33,200 of taxable wages rises from $199.20 to $597.60.
One employee earning $50,000, 3.4% SUTA on $25,000
FUTA is 0.6% × $7,000 = $42. SUTA applies to the first $25,000: 3.4% × $25,000 = $850. Total unemployment tax for the year is $892.
No state credit
If state unemployment tax is not paid, no credit is allowed and the full 6.0% applies: $33,200 × 6% = $1,992 of FUTA.
Frequently asked questions
What is the FUTA tax rate?+
The FUTA tax rate is 6.0% on the first $7,000 of each employee’s wages per year. Most employers receive a credit of up to 5.4% for state unemployment tax paid, so the effective rate is usually 0.6%, or a maximum of $42 per employee.
What is the difference between FUTA and SUTA?+
FUTA is the federal unemployment tax reported on Form 940 that funds the federal share of the unemployment system. SUTA is the state unemployment insurance tax, with rates and wage bases set by each state and based partly on your layoff history.
Do employees pay FUTA or SUTA?+
FUTA is paid only by employers and is never withheld from wages. SUTA is also employer-paid in almost every state; a few states, such as Alaska, New Jersey and Pennsylvania, also require small employee contributions.
What is a FUTA credit reduction state?+
A state that has borrowed from the federal unemployment trust fund and not repaid on time becomes a credit reduction state. Employers there get a smaller credit against FUTA, so they pay more federal tax on wages paid in that state, calculated on Schedule A (Form 940).
When is FUTA tax due?+
FUTA is reported annually on Form 940, due by January 31 of the following year. During the year you must deposit FUTA quarterly once your undeposited liability exceeds $500; smaller amounts roll forward.
Who has to pay FUTA?+
You generally owe FUTA if you paid wages of $1,500 or more in any calendar quarter, or had at least one employee for some part of a day in 20 or more different weeks, in the current or prior year. Household and farm employers have separate tests.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.