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FUTA and SUTA tax question
During the year, Zeno Company has a SUTA tax rate of 6.3%. TRhe taxable payroll for the year for FUTA and SUTA is $77,000. States to compute FUTA and SUTA tax and unemployment taxes.
The way I understood this was to take $77,0000 and multiply by SUTA of 6.3%= 4851 then the same with FUTA x 6.2% = 4726.73. I really d not understand unemployment part. I believe that the SUTA % is lower but I am at a loss. |
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The Futa tax rate is 6.2 but if you pay all your Suta taxes on time you can take a discount which leaves the Futa rate at .008. The Futa rate is only charged on the first 7,000 of income.
The Suta rate is state and company specific. Your company will receive a rate from the state telling what the rate is and what the taxable income is. For my state the taxable income is at 33,300 and the rate we pay is 2.88%. You only pay the rate for Futa on the taxable amount of 7,000 for each employee and on the amount your state determines to be the taxable amount for Suta. You do not pay on the total amount of payroll. |
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