Glossary · Payroll
SUTA
SUTA is state unemployment tax, the payroll tax each US state charges employers to fund unemployment benefits. Each state sets its own taxable wage base and gives each employer its own rate, based largely on how many former employees have claimed benefits. New employers usually start at a standard new-employer rate.
Glossary / SUTA · Also called State unemployment tax, SUI
How it works
The state sends you a rate notice, usually once a year. Wage bases vary widely from state to state: some use the federal $7,000 minimum and others are many times higher. A handful of states also take a small employee contribution from wages.
Paying SUTA in full and on time matters beyond the state: it earns the credit of up to 5.4% against the 6.0% federal FUTA rate. SUTA is reported on the state's own quarterly wage and tax return, separately from federal forms.
Worked example: A rate and wage base from a state notice
Suppose your state notice gives a 2.7% rate on the first $9,000 of each employee's wages. An employee earning $40,000 costs $9,000 × 2.7% = $243 in SUTA for the year. A part-time employee earning $6,000 costs $6,000 × 2.7% = $162.
Those figures are only an example. Use the rate and wage base on your own state notice, which change from year to year.
In the US and in Canada
In the United States
SUTA is a US state tax. In Canada, unemployment insurance is federal: Employment Insurance (EI) premiums are shared by employee and employer at the same rates across the country, with a lower rate in Quebec.
In AcboBooks
AcboBooks takes your state's SUTA rate and wage base in company settings and accrues SUTA on each paycheck as an expense and a payroll liability, stopping at the wage base. You file the state return yourself from the figures.
Related terms
Related on this site
Sources
Updated October 25, 2026. General information, not tax, legal or accounting advice. Rules and rates change; check with the IRS, the CRA, your state or province, or your accountant.
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