FUTA Tax Calculator

FUTA tax = 6.0% of the first $7,000 in wages paid to each employee per year (the FUTA wage base, unchanged for many years). Employers who pay their state unemployment tax (SUTA) on time and in full receive a credit of up to 5.4%, bringing the effective FUTA rate down to just 0.6% in most states.

FUTA and Social Security are entirely separate federal payroll taxes with independently set wage bases. FUTA's $7,000 base has stayed the same since 1983, while the Social Security wage base is indexed to wage growth and rises most years.

If a state has an outstanding federal unemployment loan balance for too long, the IRS can reduce that state's 5.4% credit, raising the effective FUTA rate for employers in that state. This is uncommon and state-specific — check the IRS's published credit reduction states list for the current year if you're unsure.

Per employee — the $7,000 wage base resets for each individual employee. An employer with many employees pays FUTA on up to $7,000 of each employee's wages, not $7,000 total.