Understanding State Unemployment Tax Act (SUTA)
Discover everything you need to know about SUTA, an integral aspect of managing your business's payroll and tax responsibilities. Whether you're a small business owner, a human resources professional, or simply seeking a deeper understanding of SUTA, this guide is crafted to offer you essential knowledge and useful resources.
- What is SUTA?
- Who Pays SUTA?
- Why is SUTA Important?
- Key Components of SUTA
- State-by-State SUTA Tax Rates and Wage Base Limits for 2024 Key Components of SUTA
- Streamline Your SUTA Management with SecurePayStubs
What is SUTA?
SUTA stands for State Unemployment Tax Act. It's a payroll tax that employers pay to fund unemployment benefits for workers who have lost their jobs. Each state sets its own SUTA tax rate, which can vary based on factors like the employer's industry, the history of layoffs, and the overall health of the state's unemployment fund. The funds collected from SUTA taxes are used to provide unemployment benefits to eligible workers during periods of unemployment.
Who Pays SUTA?
Employers are primarily responsible for paying SUTA taxes. These taxes are solely the employer's responsibility and are not deducted from employees' wages. However, in Alaska, New Jersey, and Pennsylvania, employees are also required to make SUTA contributions. Understanding SUTA rates and taxable wage bases can help businesses accurately budget for these expenses
Why is SUTA Important?
SUTA is crucial for both employers and employees. For employers, compliance with SUTA regulations ensures legal adherence and avoids penalties. For employees, it provides a safety net in case of job loss by providing temporary financial assistance through unemployment benefits.
Key Components of SUTA:
Tax Rates: States decide how much SUTA tax employers pay. This depends on things like what industry they're in, their past experience with unemployment, and how healthy the state's unemployment fund is.
Taxable Wage Base: Each state sets a maximum limit on wages that can be taxed for SUTA. Wages above this limit don't get taxed.
Reporting and Compliance: Employers need to accurately report wages and pay SUTA taxes to the right state agency. This keeps them in line with the rules, avoiding any penalties.
State-by-State SUTA Tax Rates and Wage Base Limits for 2024
| State | Employer Tax Rate 2024 | Taxable Wage base |
|---|---|---|
| Alabama | 0.20% to 6.80% | $8,000 |
| Alaska | 1.50% to 5.90%(Employee rate is 0.50) | $49,700 |
| Arizona | 0.05% to 14.03% | $8,000 |
| Arkansas | 0.1% to 10.0% | $7,000 |
| California | 1.5% to 6.2% | $7,000 |
| Colorado | 0.81% to 12.34% | $23,800 |
| Connecticut | 0.1% to 10.0% | $25,000 |
| Delaware | 0.1% to 5.4% | $10,500 |
| Florida | 0.10% to 5.4% | $7,000 |
| Georgia | 0.04% to 8.10% | $9,500 |
| Hawaii | 3.00% to 5.80% | $59,100 |
| Idaho | 0.281% to 5.4% | $53,500 |
| Illinois | 0.850% to 8.650% | $13,590 |
| Indiana | 0.50% to 7.40% | $9,500 |
| Lowa | 0.000% to 9.000% | $38,200 |
| Kansas | 0.16% to 6.00% | $14,000 |
| Kentucky | 0.30% to 9.00% | $11,400 |
| Louisiana | 0.09% to 6.2% | $7,700 |
| Maine | 0.28% to 6.03% | $12,000 |
| Maryland | 0.30% to 7.50% | $8,500 |
| Massachusetts | 1.079% to 15.665% | $15,000 |
| Michigan | 0.06% to 10.3% | $9,500 |
| Minnesota | 0.10% to 8.90% | $42,000 |
| Mississippi | 0.2% to 5.6% | $14,000 |
| Missouri | 0% to 6.75% | $10,000 |
| Montana | 0.00% to 6.12% | $43,000 |
| Nebraska | 0.00% to 5.40% | $24,000 |
| Nevada | 0.25% to 5.40% | $40,600 |
| New Hampshire | 0.1% to 1.7% | $14,000 |
| New Jersey | 1.200% to 7.000%(employee rate is 0.3825) | $42,300 |
| New Mexico | 0.33% to 5.4% | $31,700 |
| New York | 2.1% to 9.9% | $12,500 |
| North Carolina | 0.06% to 5.76% | $31,400 |
| North Dakota | 1.09% to 9.68% | $43,800 |
| Ohio | 0.4% to 10.1%(a mutualized rate of 0.5%) | $9,000 |
| Oklahoma | 0.3% to 9.2% | $27,000 |
| Oregon | 0.9% to 5.4% | $52,800 |
| Pennsylvania | 1.1419% to 10.3734%(employee rate is 0.07%) | $10,000 |
| Rhode Island | 1.1% to 9.7% | $29,200 |
| South Carolina | 0.06% to 5.46% | $14,000 |
| South Dakota | 0% to 9.35% | $15,000 |
| Tennessee | 0.01% to 10% | $7,000 |
| Texas | 0.25% to 6.25% | $9,000 |
| Utah | 0.3% to 7.3% | $47,000 |
| Vermont | 0.40% to 5.40% | $14,300 |
| Virginia | 0.10% to 6.20% | $8,000 |
| Washington | 1.25% to 8.15% | $68,500 |
| West Virginia | 1.50% to 8.50% | $9,521 |
| Wisconsin | 6.4% to 12% | $14,000 |
| Wyoming | 0.00% to 8.50% | $30,900 |
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This article has been updated from its original publication date of May 2, 2024.