State Unemployment Tax

State unemployment tax/state unemployment insurance, often referred as SUTA/SUI, funds unemployment benefits for workers who are out of work. Similar to federal unemployment tax (FUTA), employers are mainly responsible for paying this tax. However, state unemployment tax is calculated based on their payroll and experience rating where the specific tax rates and wage bases may differ by state.

Note: SUTA rates and wage bases are subject to change annually.

The calculation typically involves multiplying an employer's taxable payroll by the state's assigned unemployment tax rate. States have a wage base for unemployment. Once this wages base is reached by the employee, the employer will stop paying into the tax on that employee's behalf until the next calendar year.

State unemployment tax is listed in Console under the Taxes tab for a customer. In most cases the unemployment rate will need to be provider by the customer for each state they are subject to unemployment tax in. It is critical that these rates are correct so that Check is withholding the correct amount per pay period.

During quarter-end Check will perform balancing before filing quarterly returns. If Check under- or over-collected for unemployment tax in a state, the proper true up will be initiated. This can include collecting additional funds before filing.