4/20/2024 0 Comments Federal unemployment tax form![]() So for example, if an employee makes $20,000 – then the first $7,000 will be taxed at 6%. This $7,000 is often referred to as the FUTA wage base or as the federal wage. The tax applies to the first $7,000 of wages to employees during the calendar year. Most employers typically receive a credit for up to 5.4%, resulting in the final FUTA rate of 0.6%. The FUTA tax rate is currently set at 6%. This could potentially bring the FUTA liability down to as low as 0.6%. However, any companies that pay state unemployment insurance can get access to a federal FUTA tax credit of up to 5.4%. What Is the Current FUTA Tax Rate?įUTA taxes have shifted over the years. This is because FUTA is paid only by employers whereas the Social Security tax is paid by both employers and their employees. From here, it is then used to fund unemployment benefits for people who find themselves out of work.įUTA differs from other payroll taxes, such as the Social Security tax. The revenue that is generated from it is allocated to state employment insurance agencies. ![]() The Federal Unemployment Tax Act (FUTA) is United States legislation that imposes a payroll tax on any business that has employees. What Is the Federal Unemployment Tax Act (FUTA)?
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