Who pays SUTA, the employer or the employee?

The employer, in almost every state. A few states also collect an employee contribution through payroll deduction, and where that applies the state page for that state says so — it is a deduction from the employee rather than a cost to you.

What is a taxable wage base?

The maximum amount of each employee's annual wages that the tax applies to. Above it, no further state unemployment tax is owed for that employee that year. Because these ceilings are usually low relative to a salary, the tax is often fully paid within the first few months.

How do I find my state's SUTA rate?

Your state workforce agency publishes the new-employer rate and the wage base, and sends established employers their own experience rate each year. Every state page on this site links the agency page the figures were transcribed from, with the date they were read.

What Is SUTA Tax? State Unemployment Tax, Explained

SUTA is the state unemployment tax an employer pays on wages. Every state sets its own rate and its own taxable wage base, and the wage base matters more than the rate — it is why the same employee costs different amounts in different states, and why one national figure is always wrong.

What SUTA is

SUTA — state unemployment tax — funds the benefits a state pays to people who lose their jobs. In almost every state it is paid by the employer only; a small number of states also collect a share from employees.

It is charged on wages, but only up to a limit each state sets, called the taxable wage base. Once an employee's year-to-date wages pass that figure, the tax stops accruing for that employee until the next year.

The wage base matters more than the rate

This is the part that surprises people, and the part calculators get wrong. States differ in their rates, but they differ far more in their wage bases — some tax the first few thousand dollars of a wage, others tax several times that.

So a state with a higher rate on a low base can cost an employer less than a state with a low rate on a high base. Comparing rates alone tells you almost nothing, and applying one national wage base to every state — which at least one well-known calculator does — produces a figure that is right for a handful of states and wrong for most.

New employer rates and experience rates

A business with no claims history is assigned a new-employer rate, usually published by the state as a single figure, though some states vary it by industry because some industries lay off more people than others.

After a few years the state replaces it with an experience rate based on your own record. A business that rarely lays anyone off drifts toward the bottom of the state's published range; one with frequent claims drifts toward the top.

SUTA and the federal credit

Paying your state unemployment tax in full and on time earns a large credit against the federal unemployment tax, which is why the effective federal rate is a fraction of its headline. Paying late forfeits part of that credit, which makes a missed state deadline more expensive than it first appears.

Common questions

Who pays SUTA, the employer or the employee?: The employer, in almost every state. A few states also collect an employee contribution through payroll deduction, and where that applies the state page for that state says so — it is a deduction from the employee rather than a cost to you.
What is a taxable wage base?: The maximum amount of each employee's annual wages that the tax applies to. Above it, no further state unemployment tax is owed for that employee that year. Because these ceilings are usually low relative to a salary, the tax is often fully paid within the first few months.
How do I find my state's SUTA rate?: Your state workforce agency publishes the new-employer rate and the wage base, and sends established employers their own experience rate each year. Every state page on this site links the agency page the figures were transcribed from, with the date they were read.

Run it for your numbers:

See SUTA in your state's cost stack