A 6.0% federal tax on the first $7,000 of wages per employee — paid entirely by the employer.
FUTA (Federal Unemployment Tax Act) is a 6.0% tax on the first $7,000 of each employee's wages per year, paid entirely by the employer. With the standard SUTA credit, the effective FUTA rate is 0.6% in most states. This means FUTA costs an employer a maximum of $42 per employee per year ($7,000 × 0.6%). You will NOT see FUTA on your employee paystub — it is an employer-only expense.