FUTA Tax Calculator
Use our FUTA Tax Calculator to estimate 2026 federal unemployment tax, taxable wages, state tax credits, and annual employer tax liability.
Created by
Nathan Chackerian
Our FUTA Tax Calculator helps US employers estimate their annual federal unemployment tax. You can use it to calculate taxable wages, state tax credits, and final FUTA tax. It works for both individual employee lists and quick payroll estimates.
FUTA stands for the Federal Unemployment Tax Act. It helps fund the federal unemployment insurance system. Employers pay this tax based on eligible employee wages.
What Is FUTA Tax?
FUTA tax is a federal tax that most US employers must pay. It helps fund unemployment benefits for eligible workers. It also supports state workforce programs.
FUTA means Federal Unemployment Tax Act. The law sets rules for federal unemployment insurance. The IRS collects this tax from employers.
FUTA is an employer-paid tax. Employers don't take it from employee paychecks. It is also different from FICA and federal income tax withholding.
Small business owners must track their yearly payroll. This helps them find their FUTA tax liability and meet IRS rules.
FUTA Tax Rate and Wage Base for 2026
The standard gross FUTA tax rate is 6%. It applies to the first $7,000 of each employee's yearly wages. This limit is the FUTA wage base.
The maximum gross FUTA tax is $420 per employee. This amount applies before any state tax credit.
Many employers can claim a SUTA credit of up to 5.4%. SUTA means State Unemployment Tax Act. When an employer qualifies for the full credit, the net FUTA rate falls to 0.6%.
This makes the standard maximum net FUTA tax $42 per employee. However, the full credit is not automatic. State tax payments and IRS rules affect the credit.
Some states may also face a FUTA credit reduction. Employers in these credit reduction states may owe more than the standard 0.6% rate.
FUTA Tax Formula
Your FUTA tax depends on each worker's taxable wages. The IRS applies the wage limit to each worker. Your calculator also lets you subtract exempt payments first.
1. Taxable FUTA Wages
Taxable FUTA Wages = MIN(MAX(Annual Wages − Exempt Payments, $0), FUTA Wage Base)
2. Gross FUTA Tax
Gross FUTA Tax = Total Taxable Wages × FUTA Tax Rate
3. Allowed FUTA Credit
Allowed Credit Rate = MAX(0, State Tax Credit − Credit Reduction)
4. FUTA Tax Credit
FUTA Tax Credit = Total Taxable Wages × Allowed Credit Rate
5. Net FUTA Tax
Net FUTA Tax = MAX(0, Gross FUTA Tax − FUTA Tax Credit)
The standard rates are 6% for gross tax and 5.4% for the full credit. This gives a 0.6% net rate. Your actual credit may be lower. It depends on state tax payments and credit rules.
How to Use Our Online FUTA Tax Calculator
Our online FUTA Calculator has two modes. You can add each worker or use a quick estimate.
Set the tax details: Enter the FUTA tax rate and wage base. The default values are 6% and $7,000.
Enter employee wages: In list mode, add each worker's annual wages and exempt payments. You can also add an employee name. In quick mode, enter the employee count, average wages, and exempt payments per worker.
Enter the tax credit: Set the state unemployment tax credit. Then enter any credit reduction that applies. The default credit is 5.4%, with no reduction.
Calculate FUTA tax: Submit your details with the calculator's calculate option. It will work out taxable wages and the tax due.
Read your results: Check total wages, exempt payments, and taxable wages. You can also see gross tax, allowed credit, net rate, and final tax. The result shows average tax per worker and a deposit flag.
The calculator uses the values you enter. It does not check your state tax records or confirm credit eligibility. Check your actual state tax status before you file.
FUTA Tax Calculation Example
Suppose a US company has one worker. The worker earns $50,000 in 2026. Assume no exempt payments apply.
The employer qualifies for the full 5.4% SUTA credit. No credit reduction applies.
Step 1: Find taxable wages
Annual Employee Wages = $50,000
FUTA Wage Base = $7,000
Taxable FUTA Wages = $7,000
Step 2: Find gross FUTA tax
Gross FUTA Tax = $7,000 × 6%
Gross FUTA Tax = $420
Step 3: Find the standard tax credit
Standard FUTA Credit = $7,000 × 5.4%
Standard FUTA Credit = $378
Step 4: Find net FUTA tax
Net FUTA Tax = $420 − $378
Net FUTA Tax = $42
The employer owes $42 for this worker. This is the standard maximum net FUTA tax per worker. It applies when the employer gets the full credit.
If a worker earns less than $7,000, only the eligible wages count. For example, a worker who earns $5,000 has $5,000 in taxable wages. At the standard 0.6% net rate, the tax is $30.
FUTA vs. SUTA Tax
FUTA is a federal unemployment tax. SUTA is a state unemployment tax. Both help fund unemployment benefits for eligible workers.
Employers pay FUTA to the federal government. They pay SUTA to the state unemployment agency. Each state sets its own SUTA rules and rates.
State unemployment tax payments may help employers claim a FUTA tax credit. A full credit can lower the net FUTA rate to 0.6%. Late payments or credit reduction rules may raise the final tax.
FUTA and SUTA are not the same as FICA. FICA funds Social Security and Medicare. FUTA and SUTA support unemployment insurance.
FUTA Tax Filing and IRS Form 940
Employers use IRS Form 940 to report their annual FUTA tax. The form covers wages paid during the calendar year. It also reports tax credits and any extra tax due.
For 2026 wages, the general Form 940 due date is February 1, 2027. Employers who deposit all FUTA tax on time may file by February 10, 2027.
You may also need to make tax deposits during the year. If your total FUTA tax due is over $500, deposit rules apply. If your tax is $500 or less, carry it forward. Keep doing this until your total is over $500.
Keep clear payroll records for each worker. Track annual wages, exempt payments, and state tax payments. These records help you report the right amount on Form 940.
Final Verdict
Our FUTA Tax Calculator makes it easier to estimate annual federal unemployment tax. It helps employers calculate taxable wages, apply state tax credits, and find their estimated tax liability.
Use it to plan your payroll tax costs. Before filing, check your state tax payments and credit rules. Always compare your estimate with the latest IRS guidance.
Frequently Asked Questions
1. What is the FUTA tax rate for 2026?
The gross FUTA tax rate is 6%. Employers who qualify for the full 5.4% credit pay a standard net rate of 0.6%.
2. Who pays FUTA tax?
Employers pay FUTA tax from their own funds. Workers don't pay this tax.
3. What is the FUTA wage base?
The FUTA wage base is $7,000 per worker per calendar year. Only the first $7,000 in eligible wages is subject to FUTA tax.
4. What is the maximum FUTA tax per employee?
The maximum gross tax is $420 per worker. With the full 5.4% credit, the standard maximum net tax is $42.
5. How do you calculate FUTA tax?
First, find each worker's taxable wages. Multiply the total by 6%. Then subtract the allowed state unemployment tax credit.
6. Does FUTA tax come out of employee paychecks?
No. FUTA is an employer-paid tax. Employers must not deduct it from employee wages.
7. What is the difference between FUTA and SUTA?
FUTA is a federal unemployment tax. SUTA is a state unemployment tax. Both help fund unemployment benefits.
8. What is IRS Form 940?
Form 940 is the annual federal unemployment tax return. Employers use it to report FUTA wages, credits, and tax due.