Quick Answer

FUTA tax is 6% on the first $7,000 of each employee's wages, but employers who pay SUTA taxes on time receive a 5.4% credit, reducing the net FUTA rate to 0.6%. Maximum FUTA per employee = $7,000 × 0.6% = $42/year.

FUTA Tax Calculator 2026

Calculate your federal unemployment tax (FUTA) liability per employee and total company exposure.
Net rate 0.6% on first $7,000 wages. 2026 FUTA rules.

Last updated: September 2026 — rates sourced from IRS Publication 15, SSA & state revenue departments
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How FUTA works for employers in 2026

FUTA funds the federal unemployment insurance system. Employers pay 6% on the first $7,000 of wages per employee, but a 5.4% credit is available to employers current on their state unemployment taxes (SUTA), making the effective net rate just 0.6%.

Maximum annual FUTA per employee = $7,000 × 0.6% = $42. For a 10-person company, maximum total FUTA = $420/year. The actual amount may be less if any employee doesn't reach the $7,000 wage base (part-time, new hires mid-year, terminated employees).

For the complete employer payroll cost including FICA matching, SUTA, and workers' compensation, use the Employer Tax Calculator.

FUTA LiabilityAnnual

Enter employee count and wages then click Calculate.

Disclaimer: Results are estimates based on 2026 IRS and published government rates. Not a substitute for licensed payroll software or professional tax or financial advice.

FAQ

FUTA Tax Calculator questions answered

FUTA (Federal Unemployment Tax Act) is a federal payroll tax paid entirely by employers — never withheld from employees' paychecks. The gross rate is 6% on the first $7,000 of wages per employee per year. Employers who pay their state unemployment taxes (SUTA) on time receive a 5.4% FUTA credit, bringing the effective rate to 0.6%. Maximum FUTA per employee = $42/year.
The FUTA taxable wage base is $7,000 per employee per year — this has remained unchanged since 1983. Once an employee earns $7,000 in wages, FUTA taxes stop for that employee for the remainder of the year. Part-time and seasonal workers who never reach $7,000 in the year have FUTA calculated on their total annual wages.
FUTA taxes are deposited quarterly if the accumulated liability exceeds $500. If FUTA liability for the quarter is $500 or less, it can be carried forward to the next quarter. Deposits are due by the last day of the month following the quarter end: April 30 (Q1), July 31 (Q2), October 31 (Q3), January 31 (Q4). The annual Form 940 is due January 31.
If a state borrows federal funds to pay unemployment benefits and doesn't repay them by November 10, the FUTA credit is reduced by 0.3% per year the loan is outstanding. This means employers in credit reduction states pay a higher effective FUTA rate. The DOL announces credit reduction states each November. In 2025–2026, check the DOL website for the current list.

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