The state unemployment tax, also called the state payroll tax or simply "˜SUTA,' is a payroll tax you pay into your state's unemployment benefits fund. If one of your employees ever gets laid off and starts collecting state unemployment insurance, it's likely that money will come from your state's State Unemployment Tax Act fund.
SUTA is different from the FUTA tax (i.e. the Federal Unemployment Tax Act) which is a payroll tax employers must pay to the federal government.
Any U.S.-based business with employees must pay SUTA. The moment you hire your first employee and register as an employer with your state, you'll have to start making SUTA payments.
In most cases the employer pays SUTA. In Alaska, New Jersey, and Pennsylvania, however, SUTA is partially garnered from an employee's wages as well.
Most states require that you pay SUTA every quarter of the calendar year.
In California, for example, quarterly returns for SUTA and other state payroll taxes are due on April 30th, July 31st, October 31st and January 31st.
Make sure to check your state's tax authority (links below) for exact dates.
The moment you hire your first employee, the IRS and your state consider you an employer.
This means that in addition to getting an Employer Identification Number (EIN), registering for workers' compensation insurance and paying certain local taxes, you have to sign up for a SUTA tax account with your state tax authority.
If you're based in California, for example, you have to start paying SUTA once you've paid an employee more than $100 in a calendar quarter.
You'll pay SUTA to the California Employment Development Department (EDD), which you can register with online using EDD's e-Services for Business.
To calculate your SUTA tax payments, you need to know two things:
These amounts vary by state, and they're subject to change.
Each state usually has a standard SUTA tax rate for new employers. If you've been an employer for a while (i.e. an "˜experienced' employer) your state might increase or decrease your company's individual SUTA tax rate, depending on how many of your former employees file for unemployment
Let's say you run a business in California with three employees. For 2020, the taxable wage base (or "˜taxable wage limit') in California is$7,000 per employee, and the average SUTA tax is 3.4%.
That means that in 2020, you'll pay:
$7,000 per employee x 3 employees x 3.4% = $714 in SUTA tax
Because SUTA tax rules vary so much by state, we highly recommend checking your state tax authority's website to get clear on your state's SUTA tax rules, rates and wage base.
Here are links to each state's tax authority, along with SUTA tax rates and wage bases for each state for 2021:
Website: Alabama Department of Labor
Taxable wage base: $8,000
Tax rate for new employers: 2.7%
Tax rate for experienced employers: 0.65% to 6.8%
Website: Alaska Department of Labor and Workforce Development
Taxable wage base: $41,500
Tax rate for new employers: 1.28%
Tax rate for experienced employers: 1.5 - 5.9%
Website: Arizona Department of Economic Security
Taxable wage base: $7,000
Tax rate for new employers: 2.0%
Tax rate for experienced employers: 0.05 - 6.42%
Website: Arkansas Department of Labor
Taxable wage base: $7,000
Tax rate for new employers: 3.1%
Tax rate for experienced employers: 0.3 - 14.2%
Website: California Employment Development Department
Taxable wage base: $7,000
Tax rate for new employers: 3.4%
Tax rate for experienced employers: 1.5 - 6.2%
Website: Colorado Department of Labor and Employment
Taxable wage base: $13,600
Tax rate for new employers: 1.7% - 5.94%
Tax rate for experienced employers: 0.58 - 7.40%
Website: Connecticut Department of Labor
Taxable wage base: $15,000
Tax rate for new employers: 3.4%
Tax rate for experienced employers: 1.9 - 6.8%
Website: Delaware Department of Labor
Taxable wage base: $16,500
Tax rate for new employers: 1.8% - 2.3%
Tax rate for experienced employers: 0.3 - 8.2%
Website: Department of Employment Services
Taxable wage base: $9,000
Tax rate for new employers: 2.7%
Tax rate for experienced employers: 1.6 - 7%
Website: Florida Department of Revenue
Taxable wage base: $7,000
Tax rate for new employers: 2.7%
Tax rate for experienced employers: 0.1 "“ 5.4%
Website: Georgia Department of Labor
Taxable wage base: $9,500
Tax rate for new employers: 2.7%
Tax rate for experienced employers: 0.4 - 8.10%
Website: Hawaii Department of Labor
Taxable wage base: $48,100
Tax rate for new employers: 2.4%
Tax rate for experienced employers: 0.01 - 5.6%
Website: Idaho Department of Labor
Taxable wage base: $41,600
Tax rate for new employers: 1.0%
Tax rate for experienced employers: 0.255 - 5.4%
Website: Illinois Department of Labor
Taxable wage base: $12,740
Tax rate for new employers: 3.125%
Tax rate for experienced employers: 0.625 - 7.25%
Website: Indiana Department of Labor
Taxable wage base: $9,500
Tax rate for new employers: 2.5%
Tax rate for experienced employers: 0.5 - 7.4%
Website: Iowa Division of Labor
Taxable wage base: $31,600
Tax rate for new employers: 1.0% - $7.5%
Tax rate for experienced employers: 0 - 7.5%
Website: Kansas Department of Labor
Taxable wage base: $14,000
Tax rate for new employers: 2.7%
Tax rate for experienced employers: 0 - 7.1%
Website: Kentucky Office of Unemployment Insurance
Taxable wage base: $10,800
Tax rate for new employers: 2.7%
Tax rate for experienced employers: 0.3 - 9.0%
Website: Louisiana Workforce Commission
Taxable wage base: $7,700
Tax rate for new employers: N/A
Tax rate for experienced employers: 0.09 - 6.2%
Website: Maine Department of Labor Taxable wage base: $12,000 Tax rate for new employers: 1.86% Tax rate for experienced employers: 0 - 5.4%
Website: Maryland Department of Labor
Taxable wage base: $8,500
Tax rate for new employers: 2.6%
Tax rate for experienced employers: 0.3 - 7.5%
Website: Massachusetts Executive Office of Labor and Workforce Development
Taxable wage base: $15,000
Tax rate for new employers: 2.42%
Tax rate for experienced employers: 0.94 - 14.37%
Website: Michigan Department of Licensing and Regulatory Affairs
Taxable wage base: $9,000
Tax rate for new employers: 2.7%
Tax rate for experienced employers: 0.06 - 10.3%
Website: Minnesota Department of Labor
Taxable wage base: $35,000
Tax rate for new employers: 1 - 8.9%
Tax rate for experienced employers: 0.2 - 9.1%
Website: Mississippi Department of Employment Security
Taxable wage base: $14,000
Tax rate for new employers: 1.0%
Tax rate for experienced employers: 0.2 - 5.4%
Website: Missouri Department of Labor Taxable wage base: $11,500 Tax rate for new employers: 2.376% Tax rate for experienced employers: 0 - 5.4%
Website: Montana Department of Labor
Taxable wage base: $34,100
Tax rate for new employers: 1 - 2.4%
Tax rate for experienced employers: 0 - 6.12%
Website: Nebraska Department of Labor
Taxable wage base: $9,000
Tax rate for new employers: 1.25%
Tax rate for experienced employers: 0 - 5.4%
Website: Nevada Office of the Labor Commissioner
Taxable wage base: $32,500
Tax rate for new employers: 3%
Tax rate for experienced employers: 0.3 - 5.4%
Taxable wage base: $14,000
Tax rate for new employers: 1.2%
Tax rate for experienced employers: 0.1 - 7.0%
Website: New Jersey Department of Labor
Taxable wage base: $35,300
Tax rate for new employers: 2.8%
Tax rate for experienced employers: 0.4 - 5.4%
Website: New Mexico Department of Workforce Solutions
Taxable wage base: $25,800
Tax rate for new employers: .33 - 5.4%
Tax rate for experienced employers: .33 - 6.4%
Website: New York State Department of Labor
Taxable wage base: $11,600
Tax rate for new employers: 2.5%
Tax rate for experienced employers: 0.6 - 5.76%
Website: North Carolina Department of Labor
Taxable wage base: $25,200
Tax rate for new employers: 1.0%
Tax rate for experienced employers: 0.6 - 5.76%
Website: North Dakota Department of Labor
Taxable wage base: $37,900
Tax rate for new employers: 1.02%
Tax rate for experienced employers: 0.08 - 9.69%
Website: Ohio Department of Job and Family Services
Taxable wage base: $9,000
Tax rate for new employers: 2.7%
Tax rate for experienced employers: 0.3 - 9.4%
Website: Oklahoma Department of Labor
Taxable wage base: $18,700
Tax rate for new employers: 1.5%
Tax rate for experienced employers: 0.1 - 5.5%
Website: State of Oregon: Employment Department
Taxable wage base: $42,100
Tax rate for new employers: 2.1%
Tax rate for experienced employers: 0.7 - 5.4%
Website: Pennsylvania Department of Labor & Industry
Taxable wage base: $10,000
Tax rate for new employers: 3.689%
Tax rate for experienced employers: 1.2905 - 9.9333%
Website: Rhode Island Department of Labor and Training
Taxable wage base: $24,000
Tax rate for new employers: 1.06%
Tax rate for experienced employers: .90 - 9.4%
Website: South Carolina Department of Revenue
Taxable wage base: $14,000
Tax rate for new employers: 1.03%
Tax rate for experienced employers: 0.06 - 5.46%
Website: South Dakota Department of Labor and Regulation
Taxable wage base: $15,000
Tax rate for new employers: 0.55%
Tax rate for experienced employers: 0 - 9.35%
Website: Tennessee Labor & Workforce Development
Taxable wage base: $7,000
Tax rate for new employers: 2.7%
Tax rate for experienced employers: 0.01 - 10%
Website: Texas Workforce Commission
Taxable wage base: $9,000
Tax rate for new employers: 2.7%
Tax rate for experienced employers: 0.31 - 6.31%
Website: Utah Labor Commission
Taxable wage base: $36,600
Tax rate for new employers: Varies by industry
Tax rate for experienced employers: 0.1 - 7.1%
Website: Vermont Department of Labor
Taxable wage base: $16,100
Tax rate for new employers: 1.0%
Tax rate for experienced employers: 0.8 - 6.5%
Website: Virginia Department of Labor & Industry
Taxable wage base: $8,000
Tax rate for new employers: 2.51 - 6.21%
Tax rate for experienced employers: 0.11 - 6.21%
Website: Washington State Department of Labor & Industries
Taxable wage base: $52,700
Tax rate for new employers: N/A
Tax rate for experienced employers: 0.13 - 5.72%
Website: West Virginia Division of Labor
Taxable wage base: $12,000
Tax rate for new employers: 2.7%
Tax rate for experienced employers: 1.5 - 12%
Website: Wisconsin Department of Workforce Development
Taxable wage base: $14,000
Tax rate for new employers: 3.05%
Tax rate for experienced employers: 0 - 12%
Website: Wyoming Department of Workforce Services
Taxable wage base: $26,400
Tax rate for new employers: Minimum of 1.22%
Tax rate for experienced employers: 0.18 - 8.72%
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