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SUTA Tax: Your Questions Answered

By Nick Zarzycki — Reviewed by Janet Berry-Johnson, CPA on February 21, 2020

What is the SUTA tax?

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.

Who pays the SUTA tax?

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.

How often is SUTA tax paid?

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.

How do I register for a SUTA account?

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.

How to calculate the SUTA tax

To calculate your SUTA tax payments, you need to know two things:

  1. your ‘taxable wage base’ per employee
  2. your state unemployment tax rate

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

SUTA Tax Calculation Example

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

SUTA rates and wage bases by state for 2020

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 2020:

Alabama

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%

Alaska

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%

Arizona

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%

Arkansas

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%

California

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%

Colorado

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%

Connecticut

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%

Delaware

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%

District of Columbia

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%

Florida

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%

Georgia

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%

Hawaii

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%

Idaho

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%

Illinois

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%

Indiana

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%

Iowa

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%

Kansas

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%

Kentucky

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%

Louisiana

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%

Maine

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%

Maryland

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%

Massachusetts

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%

Michigan

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%

Minnesota

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%

Mississippi

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%

Missouri

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%

Montana

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%

Nebraska

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%

Nevada

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%

New Hampshire

New Hampshire

Taxable wage base: $14,000

Tax rate for new employers: 1.2%

Tax rate for experienced employers: 0.1 - 7.0%

New Jersey

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%

New Mexico

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%

New York

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%

North Carolina

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%

North Dakota

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%

Ohio

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%

Oklahoma

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%

Oregon

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%

Pennsylvania

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%

Rhode Island

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%

South Carolina

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%

South Dakota

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%

Tennessee

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%

Texas

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%

Utah

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%

Vermont

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%

Virginia

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%

Washington

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%

West Virginia

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%

Wisconsin

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%

Wyoming

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%


This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.

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