FUTA
Business & Finance abbreviation · Tax
| Stands for | Federal Unemployment Tax Act tax |
|---|---|
| Categories | Business & Finance |
FUTA stands for Federal Unemployment Tax Act tax, a tax abbreviation.
Federal payroll tax paid only by employers, at 6.0% on the first $7,000 of each employee's annual wages, to fund unemployment programs. Employers that pay state unemployment taxes on time receive a credit of up to 5.4%, so the usual net rate is 0.6%, or $42 per employee.
Example: FUTA is cheap for us at $42 a head, but the state unemployment rate is another story.
Usage notes
The $7,000 wage base has not changed since 1983. Employers report FUTA annually on Form 940 but must deposit it quarterly once the liability exceeds $500. The federal portion pays for administering state programs and lends money to states whose unemployment trust funds run dry.
Related abbreviations
More tax abbreviations
- FATCA – Foreign Account Tax Compliance Act
- FBAR – Report of Foreign Bank and Financial Accounts (FinCEN Form 114)
- FEIE – Foreign earned income exclusion
- FICA – Federal Insurance Contributions Act tax
- FIT – Federal income tax
- FTC – Foreign tax credit
- GST – Goods and services tax
- GSTIN – Goods and Services Tax Identification Number
- HOH – Head of household
- HST – Harmonized sales tax
- IHT – Inheritance tax
- IOSS – Import One-Stop Shop