FUTA & SUTA Unemployment Tax Rates

How to set up FUTA (Federal Unemployment) and SUTA (State Unemployment) with wage bases and rates for the employer share and employee share (if needed).

Getting There

1. Log on to Procare as System Supervisor.
2. From the Procare Home screen, go to Configuration > System > Locations & Users > Regions & Schools.
3. FUTA is set at the region level, while SUTA is set for each individual school.
   1. For FUTA, just double-click the name of the Region.
      
   2. For SUTA, click the small plus sign (+) to the left of the Region Code to display all schools in that region…
      
      …and then dbl-click the School Name.
      
4. At the Options screen, select Payroll (left side).
   
5. Click the plus sign (+) next to Futa 1 or Futa 2 (or Suta 1 or Suta 2) and enter a Tax Year, Wage Base and Share for the employer and employee (if applicable). See examples below.
   Note: You must enter information for the current year, although you may store rates for up to two years at a time. Use either Futa 1 or Futa 2 (or Suta 1 or Suta 2)  for the current year. The correct year will be selected automatically for tax calculations.

FUTA (Federal Unemployment) Settings

FUTA is paid by the employer only. There is no withholding for the employee. Taxes are paid on the first $7,000 in wages for each employee. This is known as the wage base. See: IRS Publication 15

FUTA Rates
Since July 2011 the FUTA tax rate has been 6.0%; however, employers receive an offset credit for the amount paid for SUTA (State Unemployment) of up to 5.4%. Therefore, if you qualify for the full 5.4% credit your net rate would be 0.6% (6.0 – 5.4 = 0.6).

Important! There are rate changes for a number of states, known as “Credit Reduction States”. Please confirm your rate with your tax adviser or the IRS.

See: IRS Instructions for Credit Reduction States.

FUTA Example

SUTA (State Unemployment) Settings

SUTA is paid by the employer, although a few states also require the employee to pay a share. The wage base and percentage vary according to your state. Rates may also depend on the type of business you have and your history of layoffs. Please confirm the wage base(s) and rate(s) for your business with your tax adviser or state bureau of labor.

SUTA Example