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SUTA Tax Rate 2024: All You Need to Know

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    Every employer should understand how the State Unemployment Tax Act (SUTA) contribution rates affect the places where they operate. Neglecting SUTA or “state unemployment insurance” (SUI) can subject companies to fines and other legal penalties. Use this comprehensive resource as your guide to verify the rates of states relevant to your employees and comply with confidence.

    State taxes vary — including the State Unemployment Tax Act (SUTA) contribution rates. You should be aware of current rates and understand how the tax is calculated.

    What is SUTA tax?

    SUTA is a payroll tax required from employers. It’s also known as “state unemployment insurance” (SUI). These taxes are placed in a state’s unemployment fund to pay benefits to employees who have separated from their employer. Neglecting to pay SUTA or SUI taxes can result in:

    • fines
    • penalty fees
    • criminal charges to the employer

    While the Federal Unemployment Tax is only paid by the employer, some states require additional money to be withheld from an employee’s wages in addition to the amounts contributed by the employer for SUTA.
    Several factors are considered when calculating SUTA rates, including:

    • the age of a business
    • turnover rate for the industry in which the business operates
    • the number of former employees who have filed unemployment claims

    Typically, SUTA taxes are due at the end of the month following the end of each quarter.

    Who pays SUTA tax?

    In general, employers pay SUTA taxes, but three states have an exception. Here they are, along with their employee tax rates:

    • Alaska (0.5%)
    • New Jersey (0.425%)
    • Pennsylvania (0.07%)

    For employees who work in only one state, SUTA taxes are paid to the state where the work takes place. For employees who work in two or more states, determining the correct state to pay SUTA can involve identifying the state where the employee has an office or where the employee receives direction from their employer.

    In general, if all your employees work in one state, you’ll only pay SUTA taxes to just that state. If your company has employees in multiple states, you’ll submit SUTA tax payments to each applicable state.

    An employer’s SUTA rate is often referred to as a contribution rate. The contribution rate is determined by the employer’s experience rating.

    Your contribution rate can change annually based on state unemployment agency evaluations. Each state agency will send your company a SUTA rate notice providing a breakdown of how rates are determined.

    SUTA tax calculator: How is SUTA calculated?

    Most states rely on the reserve ratio method for determining an employer’s experience rating. Employers will pay their contributions into a pre-assigned account, which in turn is used to pay unemployment benefits to the business’s former employees throughout the year. The reserve ratio is calculated as follows:

    (the employer’s account balance) / (the employer’s average taxable payroll for usually three years) = (the reserve ratio expressed as a percentage)

    The state unemployment agency determines the contribution rates for positive-rated employers and negative-rated employers annually. Employers with a positive reserve ratio are assigned the lowest tax rates, while negative-ratio employers are assigned substantially higher rates.

    Visit your applicable state agency’s website for more information.

    SUTA tax rate and wage base 2024

    The chart below outlines 2024 SUTA employer tax rate ranges. Keep in mind the wage base is the limit of SUTA tax withholdings.

    Don’t forget that some SUTA rates are specific to an employer. Certain industries — like construction or hazardous waste disposal — get a special assessment that impacts their rate. All of these rates are subject to change. Be sure to visit your state’s official government website for complete and finalized information.

    States Wage Base Min (%) Max (%) 2024 employee rate (%)
    Alabama $8,000 0.2 6.8
    Alaska $49,700 1 5.4 0.5
    Arizona $8,000 0.08 20.93
    Arkansas $7,000 0.225 10.125
    California $7,000 1.5 6.2
    Colorado $23,800 0.81 12.34
    Connecticut $25,000 1.1 7.8
    D.C. $9,000 1 7.4
    Delaware $10,500 0.3 6.5
    Florida $7,000 0.1 5.4
    Georgia $9,500 0.06 8.1
    Hawaii $59,100 1.7 6.2
    Idaho $53,500 0.352 5.4
    Illinois $13,590 0.85 8.65
    Indiana $9,500 0.5 11.2
    Iowa $38,200 0 7
    Kansas $14,000 0.1 6
    Kentucky $11,400 0.3 9
    Louisiana $7,700 0.09 6.2
    Maine $12,000 0.28 6.03
    Maryland $8,500 0.3 7.5
    Massachusetts $15,000 0.56 8.62
    Michigan $9,500 0.06 10.3
    Minnesota $42,000 0.1 9.00
    Mississippi $14,000 0 5.4
    Missouri $10,000 0 5.4
    Montana $43,000 0 6.12
    Nebraska $9,000 0 5.4
    Nevada $40,600 0.25 5.4
    New Hampshire $14,000 0.1 7.5
    New Jersey $42,300 1.2 7 0.425
    New Mexico $31,700 0.33 5.4
    New York $12,500 2.025 9.825
    North Carolina $31,400 0.06 5.76
    North Dakota $43,800 0.08 9.68
    Ohio $9,000 0.4 10.1
    Oklahoma $27,000 0.3 9.2
    Oregon $52,800 0.9 5.4
    Pennsylvania $10,000 1.419 10.3734 0.07
    Rhode Island $29,200 1.1 9.7
    South Carolina $14,000 0.06 5.46
    South Dakota $15,000 0 8.8
    Tennessee $7,000 0.01 10
    Texas $9,000 0.25 6.25
    Utah $47,000 0.3 7.3
    Vermont $14,300 0.4 5.4
    Virginia $8,000 0.1 6.2
    Washington $68,500 0.27 6.02
    West Virginia $9,000 1.5 8.5
    Wisconsin $14,000 0 12
    Wyoming $30,900 0.48 9.78

    Does managing state and local tax laws create stress for HR? Paycom’s single software helps make the payroll tax management process simple. Learn more about our comprehensive solution today.

    DISCLAIMER: The information provided herein does not constitute the provision of legal advice, tax advice, accounting services or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional legal, tax, accounting or other professional advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation and for your particular state(s) of operation.