What is State Unemployment Taxes Act

business · EN

State Unemployment Tax (SUTA), also known as State Unemployment Insurance (SUI) or Reemployment Tax in some states, is a mandatory state-level payroll tax paid by employers. The funds collected are used to provide temporary financial assistance (unemployment benefits) to eligible workers who lose their jobs through no fault of their own, such as during layoffs SUTA is calculated as a percentage of each employee’s wages, up to a state-defined taxable wage base. The funds collected are used to support eligible workers while they search for new employment. Employers who pay their SUTA taxes correctly and on time may also qualify for credits toward their Federal Unemployment Tax Act (FUTA) liability, helping reduce overall payroll tax costs. The SUTA tax rate is an acronym for the State Unemployment Tax Act rate, and it is the percentage by which employers are required