In payroll, the sum of all earnings for an employee that are eligible for a particular type of tax are considered Taxable Wages with respect to that tax. Each tax is different and has different regulations about limits to the amount of wages that can be considered taxable with respect to that tax.
|Total Taxable Wages:||16000|
As you can see in this example, Joe Spittle earns 8500. Since this is higher than the limit of FUTA for taxable wages, which is 7000, the FUTA tax calculated for Joe cannot be calculated against any more than the limit of 7000.