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SESK: Stuff Everyone Should Know · sesk.info/founder-futa-net-rate

With the full credit for state unemployment taxes, what is the federal unemployment (FUTA) tax rate?

0.6% of the first $7,000 of each employee's wages.

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  1. 6.2% of all wages
  2. 1.45% of the first $7,000
  3. 0.6% of the first $7,000 ✔

Why: The FUTA rate is 6.0% on the first $7,000 paid to each employee each year. Paying state unemployment tax in full and on time can earn a credit of up to 5.4%, leaving 0.6%.

Huh, didn't know that: Only the employer pays FUTA. It is never taken out of an employee's paycheck.

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References

Answer: 0.6% of the first $7,000. The FUTA rate is 6.0% on the first $7,000 paid to each employee each year. Paying state unemployment tax in full and on time can earn a credit of up to 5.4%, leaving 0.6%.

  1. IRS Topic no. 759, Form 940 FUTA filing and deposit requirements www.irs.gov/taxtopics/tc759
    If you're entitled to the maximum 5.4% credit, the FUTA tax rate after credit is 0.6%.
    Checked 2026-10-11.
  2. IRS Topic no. 759, Form 940 FUTA filing and deposit requirements www.irs.gov/taxtopics/tc759
    The FUTA tax rate is 6.0%. The tax applies to the first $7,000 you paid to each employee as wages during the year.
    Checked 2026-10-11.
  3. IRS: Federal unemployment tax www.irs.gov/individuals/international-taxpayers/federal-unemployment-tax
    Only the employer pays FUTA tax; it is not deducted from the employee's wages.
    Checked 2026-10-11.

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