What is the State Unemployment Tax Act? (SUTA)

Updated on February 7, 2024

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SUTA definition and meaning

The State Unemployment Tax Act, or SUTA is a payroll tax employers must pay on behalf of their employees to their state unemployment fund. Some states require that both the employer and employee pay SUTA taxes.


More about the State Unemployment Tax (SUTA)

An employer’s SUTA rate is based on their experience and industry. A new rate will be periodically (usually annually) assigned as the employer gains more experience. Taxable income limits are set by each state. Employers need to report their SUTA contributions quarterly.

Using SUTA in a sentence

“I cut checks for employee bonuses, but I forgot to take out for SUTA, so I’ll have to gross-up the amount and adjust it in my ledger.”

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