FAQs
1) What’s the difference between FUTA and SUTA?
FUTA is the federal unemployment program funded by employers; SUTA is a state program with state‑specific rules. Both are typically employer‑paid.
2) What wage bases should I use?
The federal wage base is often 7,000 per employee. State wage bases vary widely; check your state’s current threshold and enter it here.
3) How does the FUTA credit work?
If you pay state unemployment on an employee’s wages, you may receive a credit against federal unemployment, up to a maximum percentage. Credit‑reduction states lower the maximum credit.
4) Why is credit applied only to part of the wages?
Credit is calculated on the portion of wages that are FUTA‑taxable and also SUTA‑taxable. If your state base is lower than the federal base, credit may not cover all FUTA‑taxable wages.
5) Are rates the same for every employer?
No. States assign different SUTA rates based on experience. New employers often receive a provisional rate before an experience rate is set.
6) Do employees pay these taxes?
In most jurisdictions, unemployment contributions discussed here are paid by the employer, not withheld from employee paychecks.
7) Is this legal or tax advice?
No. This is an educational tool. Always verify calculations and filing requirements against official guidance and your payroll provider.