FUTA Tax Rate 2011

Employers have many responsibilities including handling the proper standards when it comes to paying federal and state taxes.
FUTA taxes are forms of payroll taxes for all W-2 employees.
Online payroll software can be of great help to you when calculating the FUTA tax rate for each employee. The FUTA tax is paid by employers and is not deducted from the pay of an employee.

IRS Publication 15 is available for you to consult for the full list of information on the FUTA tax.

The FUTA tax rate stands for the Federal Unemployment Tax Act and it is a United States federal law that imposes a federal employer tax used to fund state workforce agencies.

Employers have requirements for such payroll tax tasks as:

Withholding
Depositing
Paying
Reporting
Tax forms given to employees
Tax forms employees give to employers
Tax forms sent to the IRS
Tax forms sent to Social Security

Calculate the FUTA Tax Rate for Your Employees

Online payroll software such as, QuickBooks will make handling payroll taxes quite easy. Payroll software will calculate your federal and state payroll taxes and will let you know when your taxes are due. You have the option of mailing in your payroll taxes or filing them electronically.

Employers report the FUTA tax by filing an annual Form 940 with the IRS. The FUTA tax rate can change from year to year as we have seen. The current FUTA Tax Rate is 6.2% on the first $7,000 of gross earnings of each worker per year. Once the worker has reached $7,000 of earnings for that particular year the employer no longer pays the FUTA tax for that employee. This is an example of how the FUTA tax will look: 6.2% x $7,000 = $434. This is the amount all employers will pay on the first $7,000 earned by each employee. Following June 30th, 2011 the FUTA tax rate goes down to 6.0%.

Over one million businesses use Intuit’s Online Payroll software. If you would like automatic federal and state tax calculations done for you with a 100% guarantee of accuracy, you should try QuickBooks Payroll software for calculating your FUTA tax rate for your employees. In addition to federal and state calculations you will also have email reminders of due dates for tax payments.

There are many more benefits such as, electronic federal and state tax filing, no tax payments until they’re due, automatic W-2 preparation for your employees, electronic W-2 filing and reports on tax liability, wages, pay and more.