Tracking Taxable Wage Bases for SUTA

In most states, State Unemployment Insurance is an employer-paid tax based on the employer’s experience rating. An experience rating is the state’s method of determining how much unemployment insurance tax an employer should generally pay per year. The rating is primarily based on the volume of unemployment benefits charged to the employer’s accounts during previous years in relation to its annual payroll for the same period.

An employer pays the unemployment insurance tax, by employees SUTA wages until they reach the wage base limit. Wage base limits are governed by the state and are usually decided through a formula, percentage, or they are equal to the Federal Unemployment Tax Act (FUTA) wage base, which is $7,000. FUTA laws outline how the state derives employer tax rates, contribution and reporting requirements, eligibility conditions, and the calculation of the unemployment benefits.

Some states have made changes to their taxable wage bases for 2020; however, others may announce their changes later this year or early in 2020. The American Payroll Association tracks previous and current wage bases for anyone to view. With the APA’s Taxable Wage Bases chart, you can see if your state has changed its state unemployment wage base for 2020 and how it has changed throughout the past few years.