BEHIND THE NUMBERS
How this calculation works
Worked example
Wages of $10,000 and $5,000 become taxable amounts of $7,000 and $5,000. At the full-credit rate of 0.6%, the annual FUTA estimate is $12,000 × 0.006 = $72.
Example result: US$72.00
Apply the cap before adding payroll
The wage cap belongs to each employee. Two employees earning $5,000 each produce $10,000 of FUTA-taxable wages, while one employee earning $10,000 produces only $7,000. That is why a single total-payroll input is insufficient for this calculation.
The state credit is conditional
The full offset normally depends on qualifying state unemployment contributions paid on time. Credit reductions increase the effective federal rate and are not the same as the employer’s state unemployment rate. On the review date the final 2026 reduction schedule was not assumed, so the tool requires an explicit scenario or confirmed input.
Assumptions and rounding
- All entered amounts are annual wages subject to FUTA before the wage cap.
- The credit treatment applies consistently to all listed wages.
Questions about this calculator
Should I deduct FUTA from wages?
FUTA is an employer tax. This tool calculates employer liability, not an employee payroll deduction.
Is SUTA the same calculation?
No. State rates and wage bases differ. This page only uses the state-credit treatment relevant to federal FUTA.
Does this tell me when to deposit?
No. Quarterly accumulated liability and the IRS deposit rules must be assessed separately.