Which State Has the Highest FUTA Tax Rate?


Quick Answer

The federal unemployment tax, known as FUTA, is the same for all 50 states. As of 2015, the rate is 6 percent on the first $7,000 of wages for each employee, according to the Internal Revenue Service. A credit for state unemployment taxes paid can generally be claimed.

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Full Answer

State unemployment tax, known as SUTA, SUI or SU, varies widely between states and is affected by the employer's experience rating. The base wages subject to SUTA also vary, ranging from $7,000 in Arizona, California and Florida to $42,100 in Washington for 2015, as reported by Vision Payroll.

The tax rate varies from a minimum of 0 percent to about 14 percent, with the highest tax rates imposed by Massachusetts and Pennsylvania, explains Automatic Data Processing. These two states include assessments and additional contributions as part of the tax computation, making the unemployment portion difficult to compare.

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