Business FinancesQuestion 512 of 1605
What is the FUTA rate after the standard state credit, and how does it compare to California's State Unemployment Insurance (SUI) for new employers?
a.FUTA is 6.0% on all wages; California SUI is 1.5%
b.FUTA is 0.6% on the first $14,000; California SUI is 6.2%
c.FUTA is 6.0% on the first $14,000; California SUI is 0.6%
d.FUTA is 0.6% on the first $7,000 of wages after the state credit; California new-employer SUI is 3.4% on the first $7,000 of wages
Explanation
Federal Unemployment Tax (FUTA) is statutorily 6.0% on the first $7,000 of each employee's wages, but employers in states that pay timely SUI receive a 5.4% credit, leaving an effective FUTA rate of 0.6%. California's SUI new-employer rate is 3.4% on the first $7,000; experience-rated employers can range roughly 1.5% to 6.2%.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)