SUTA (State Unemployment Tax Act) tax, also called SUI, funds the unemployment benefits a state pays to laid-off workers. Employers pay it in every state, and workers also contribute in Alaska, New Jersey and Pennsylvania.
How the tax is calculated
SUTA owed = your rate × each employee's wages up to the state wage base. Once an employee's year-to-date wages pass the wage base, you stop paying for that employee until January 1.
Wage bases vary widely
The highest wage base is Washington's at $78,200; the lowest are Arkansas, California, Florida, Louisiana, Tennessee at $7,000. A high wage base with a low rate can cost more than a low wage base with a high rate, so compare the dollar amount, not just the rate.
How your rate is set
- New employers get a standard rate for their first one to three years, which some states set by industry.
- Experienced employers get a rate based on their history: how many former employees collected benefits compared with taxable payroll.
- States add surcharges or solvency taxes when their trust fund runs low.
States mail rate notices each year, usually in December. Check yours: errors happen, and voluntary contributions can lower your rate in some states.
SUTA and FUTA
Paying SUTA on time earns a credit of up to 5.4% against the 6.0% federal FUTA tax. When a state has an unpaid federal loan, the credit shrinks, raising FUTA for every employer in that state.
Look up your state
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming