SUTA Tax Rate
SUTA stands for State Unemployment Tax, not to be mistaken for FUTA (Federal Unemployment Tax). In every state, employers are required to pay state unemployment tax. Each state usually has different rates and caps on the amount of tax required.
State unemployment tax is a tax that is paid by employers. Employers are required to withhold this money from their employees' paychecks. Here is a payroll tax withholdings calculator that can help simplify this responsibility.
How are the SUTA tax rate amounts calculated?
The amount of tax is calculated by actual wages per employee and the cost is the responsibility of the employer, not the employee. Also, the rate is determined by the employer's experience rate. Each state usually has different set cutoff thresholds, along with a minimum and maximum tax rate.
SUTA Tax Rates can vary from .03% as the minimum to 13.55% as the maximum rate. The following are a few examples:
- California Min. rate: 1.00% Max. rate: 5.40%
- Florida Min. rate: .10% Max. rate: 5.40%
- Illinois Min. rate: .20% Max. rate: 7.25%
- Michigan Min. rate: .06% Max. rate: 10.30%
- Nevada Min. rate: .25% Max. rate: 5.40%
* SUTA tax rates are subject to change annually.
If you want to calculate SUTA tax rate for yourself or your employees, you would first look at the year-to-date earnings; you will also need to know what the cutoff threshold is for the SUTA tax: as of 2009 it was $7,000. If the earnings were more than $7,000 you would only calculate the tax up to the $7,000. Then you will need to know your state's payroll percentage tax rate (each state varies).
You can obtain this information from the Department of Revenue or the Department of Labor. Finally , you would calculate the percentage times the employee's total annual wages up to the cap to determine the tax. For example, if the percentage is 5.4% and the wages equaled $400, your SUTA tax for that employee would be $21.60.
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