Federal Unemployment Tax Rate Reduction

Effective for all payroll dollars paid after June 30, 2011, the federal unemployment tax (FUTA) rate that employers pay on the first $7,000 of employee wages has been reduced by 0.20%.  This will reduce the effective rate paid by most employers from 0.80% to 0.60%, after a credit for paying their state taxes on time.  This will result in a reduction of the FUTA taxes due of $14.00 per employee per year, if the entire $7,000 limit of wages paid are paid after June, 30.


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