Federal Unemployment Tax Act
So once the employee's wages exceed $7,000, the employer doesn't have to pay the FUTA for that employee any longer?
|SUTA||State Unemployed Tax Act|
|IRS||Internal Revenue Service|
|ITR||Income Tax Return|
|EBT||Earnings before taxes|
|pat||Profit after taxes|
|PBT||Profit before tax|
|FICA||Federal Insurance Contributions Act|
A financial acronym that represents the tax paid to the IRS by the employer to provide funds for paying unemployment compensation to workers who have lost their jobs.
The FUTA rate that employers have to pay is 6% of the first $7,000 per year of each employee's wages or salary. However, employers can take a credit up top 5.4% of taxable income if they pay state unemployment taxes. Therefore the maximum amount paid per employee is $420 and the minimum is $42.