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2022 SUTA Taxes: Here’s What You Need to Know

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.

The right payroll partner helps you maintain compliance by assisting with SUTA rate changes and more.

What is SUTA?

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.

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.

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.

Where can I find the updated 2022 SUTA rate ranges for my state?

The chart below outlines 2022 SUTA employer tax rate ranges. Please note the rates are subject to change; visit your state’s official government website for complete and finalized information.

State 2022 Employer Tax Rate Range
Alabama 0.05%-6.1%
Alaska 1%-5.4%
Arizona 0.08%-20.93%
Arkansas 0.3%-14.2%
California 1.5%-6.2%
Colorado 0.75%-10.39%
Connecticut 1.9%-6.8%
Delaware 0.3%-8.2%
Florida 0.1%-5.4%
Georgia 0.04%-8.1%
Hawaii 0.2%-5.8%
Idaho 0.252%-5.4%
Illinois 0.725%-7.625%
Indiana 0.5%-7.4%
Iowa 0%-7.5%
Kansas 0.2%-7.6%
Kentucky 0.5%-9.5%
Louisiana 0.09%-6.2%
Maine 0.053%-6.16%
Maryland 1%-10.5%
Massachusetts 0.94%-14.37%
Michigan 0.06%-10.3%
Minnesota 0.06%-9.5%
Mississippi 0.2%-5.6%
Missouri 0%-6.75%
Montana 0.13%-6.30%
Nebraska 0.0%-5.4%
Nevada 0.3%-5.4%
New Hampshire 0.1%-8.5% 
New Jersey 0.5%-5.8%
New Mexico 0.33%-6.4%
New York 2.1%-9.9%
North Carolina 0.06%-5.76%
North Dakota 0.08%-9.69%
Ohio 0.8%-10.2%
Oklahoma 0.3%-7.5%
Oregon 0.9%-5.4%
Pennsylvania 1.2905%-9.9333%
Rhode Island 1.2%-9.8%
South Carolina 0.06%-5.46%
South Dakota 0%-9.3%
Tennessee 0.01%-10%
Texas 0.31%-6.31%
Utah 0.3%-7.3%
Vermont 0.8%-6.5%
Virginia 0.33%-6.43%
Washington 0.33%-6.02%
Washington, D.C. 2.1-7.6%
West Virginia 1.5%-8.5%
Wisconsin 1.5%-8.5%
Wyoming 0%-8.5%

 

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.