Understanding PEO Pricing: SUTA - State Unemployment Taxes

Understanding SUTA

About State Unemployment Taxes (SUTA)

In every state in the USA employers are required to pay state unemployment taxes, commonly referred to as SUTA. SUTA tax rates and caps are usually different in each state where you have employees. Costs are charged to employers and NOT to employees. Tax amounts are calculated for each employee based on the actual wages paid to the employee and the unemployment experience rate of the company. Taxes due for each employee are usually capped at a max wage amount called the cutoff amount. Each state has different SUTA cutoff thresholds. In addition, each state has differing minimum and maximum rates. For new business (businesses without any experience rate) a default rate is established and it also varies by state. Taxes must be reported and paid on a 940 or 941 form (quarterly) and many states now require the employee level wage and tax reports to be submitted on magnetic media (like diskettes or CDs).

PEO – SUTA Options

In a PEO and/or co-employment arrangement, SUTA is calculated and paid by the PEO since they are technically the employers of record with the state. This alleviates business owners and managers from the tedious and complex task of calculating and reporting SUTA. Companies with employees in multiple states find this service extremely valuable. In addition, in some states the employees may be paid under the experience rate of the PEO. Circumstances vary by state and PEO – HR Outsourcing vendor. In some HR Outsourcing situations the PEO or HR Outsourcing vendor will handle the calculations and reporting but your company will maintain your own experience rating. State Unemployment Laws vary by state and you should investigate how SUTA is handled and reported with any outsourcing vendor you are considering.

2008 SUTA Tax Rates by State:

Note: SUTA rates may change annually. Please see your particular state governmental body for the latest SUTA rates.

State

State

Minimum Rate

Maximum Rate

No SUTA Experience
(New Business or unrated)

Wages Subject to Tax
(Cutoff)

Alaska

AK

1.00%

5.40%

1.50%

$31300

Alabama

AL

0.44%

6.04%

2.70%

$8000

Arkansas

AR

1.00%

10.0%

2.90%

$10000

Arizona

AZ

0.02%

5.40%

2.00%

$7000

California

CA

1.30%

5.40%

3.40%

$10000

Colorado

CO

0.00%

5.40%

1.70%

$10000

Connecticut

CT

0.50%

5.40%

3.10%

$15000

DC

DC

1.30%

6.60%

2.70%

$9000

Delaware

DE

0.30%

8.20

2.10%

$10500

Florida

FL

0.12%

5.40%

2.70%

$7000

Georgia

GA

0.30%

5.40%

2.70%

$8500

Hawaii

HI

5.40%

0.00%

5.40%

$13000

Iowa

IA

0.00%

8.00%

1.00%

$22800

Idaho

ID

0.262%

5.40

1.00%

$32200

Illinois

IL

0.20%

6.60%

2.80%

$12000

Indiana

IN

1.10%

5.60%

2.70%

$7000

Kansas

KS

0.00%

7.40%

4.00%

$8000

Kentucky

KY

0.50%

9.50%

2.70%

$8000

Louisiana

LA

0.10%

6.20%

--%

$7000

Massachusetts

MA

1.26%

12.27%

2.83%

$14000

Maryland

MD

0.30%

7.50%

2.40%

$8500

Maine

ME

0.42%

5.40%

1.53%

$12000

Michigan

MI

0.06%

10.30%

2.70%

$9000

Minnesota

MN

0.40%

9.30%

2.32%

$25000

Missouri

MO

0.00%

6.00%

2.70%

$12000

Mississippi

MS

0.40%

5.40%

2.70%

$7000

Montana

MT

0.13%

6.30%

--%

$23800

North Carolina

NC

0.00%

5.70%

1.20%

$18600

North Dakota

ND

0.20%

9.86%

1.17%

$22100

Nebraska

NE

0.00%

5.40%

1.29%

$9000

New Hampshire

NH

0.10%

6.50%

2.70%

$8000

New Jersey

NJ

0.1825%

5.40%

2.70%

$24600

New Mexico

NM

0.30%

5.40%

2.00%

$19900

Nevada

NV

0.25%

5.40%

2.95%

$24600

New York

NY

0.50%

8.50%

3.40%

$8500

Ohio

OH

0.50%

9.20%

2.70%

$9000

Oklahoma

OK

0.10%

5.50%

1.50%

$13600

Oregon

OR

0.90%

5.40%

2.40%

$30200

Pennsylvania

PA

0.30%

9.20%

3.50%

$8000

Puerto Rico

PR

1.40%

5.40%

2.90%

$7000

Rhode Island

RI

1.69%

9.79%

2.43%

$14000

South Carolina

SC

0.54%

5.40%

2.64%

$7000

South Dakota

SD

0.00%

8.50%

1.20%

$9000

Tennessee

TN

0.30%

10.00%

2.70%

$7000

Texas

TX

0.22%

6.22%

2.70%

$9000

Utah

UT

0.10%

9.10%

1.10%

$25400

Virginia

VA

0.10%

6.20%

2.50%

$8000

Virgin Islands

VI

0.00%

6.0%

1.00

$21800

Vermont

VT

0.80%

6.50%

1.00%

$8000

Washington

WA

0.38%

6.02%

--%

$31400

Wisconsin

WI

0.00%

8.90%

3.25%

$10500

West Virginia

WV

1.50%

7.50%

2.70%

$8000

Wyoming

WY

0.27%

9.03%

--%

$20100

State Unemployment Benefit Rates

View this link if you are interested in State Unemployment Benefit information. Infomation on this page is meant to be a guide only. For the most recent rates in your state consult your state authorities or visit the US Department Of Labor for more information.

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State	State	Minimum Rate	Maximum Rate	No SUTA Experience (New Business or unrated)	Wages Subject to Tax (Cutoff)
Alaska	AK	1.00%	5.40%	1.50%	$31300
Alabama	AL	0.44%	6.04%	2.70%	$8000
Arkansas	AR	1.00%	10.0%	2.90%	$10000
Arizona	AZ	0.02%	5.40%	2.00%	$7000
California	CA	1.30%	5.40%	3.40%	$10000
Colorado	CO	0.00%	5.40%	1.70%	$10000
Connecticut	CT	0.50%	5.40%	3.10%	$15000
DC	DC	1.30%	6.60%	2.70%	$9000
Delaware	DE	0.30%	8.20	2.10%	$10500
Florida	FL	0.12%	5.40%	2.70%	$7000
Georgia	GA	0.30%	5.40%	2.70%	$8500
Hawaii	HI	5.40%	0.00%	5.40%	$13000
Iowa	IA	0.00%	8.00%	1.00%	$22800
Idaho	ID	0.262%	5.40	1.00%	$32200
Illinois	IL	0.20%	6.60%	2.80%	$12000
Indiana	IN	1.10%	5.60%	2.70%	$7000
Kansas	KS	0.00%	7.40%	4.00%	$8000
Kentucky	KY	0.50%	9.50%	2.70%	$8000
Louisiana	LA	0.10%	6.20%	--%	$7000
Massachusetts	MA	1.26%	12.27%	2.83%	$14000
Maryland	MD	0.30%	7.50%	2.40%	$8500
Maine	ME	0.42%	5.40%	1.53%	$12000
Michigan	MI	0.06%	10.30%	2.70%	$9000
Minnesota	MN	0.40%	9.30%	2.32%	$25000
Missouri	MO	0.00%	6.00%	2.70%	$12000
Mississippi	MS	0.40%	5.40%	2.70%	$7000
Montana	MT	0.13%	6.30%	--%	$23800
North Carolina	NC	0.00%	5.70%	1.20%	$18600
North Dakota	ND	0.20%	9.86%	1.17%	$22100
Nebraska	NE	0.00%	5.40%	1.29%	$9000
New Hampshire	NH	0.10%	6.50%	2.70%	$8000
New Jersey	NJ	0.1825%	5.40%	2.70%	$24600
New Mexico	NM	0.30%	5.40%	2.00%	$19900
Nevada	NV	0.25%	5.40%	2.95%	$24600
New York	NY	0.50%	8.50%	3.40%	$8500
Ohio	OH	0.50%	9.20%	2.70%	$9000
Oklahoma	OK	0.10%	5.50%	1.50%	$13600
Oregon	OR	0.90%	5.40%	2.40%	$30200
Pennsylvania	PA	0.30%	9.20%	3.50%	$8000
Puerto Rico	PR	1.40%	5.40%	2.90%	$7000
Rhode Island	RI	1.69%	9.79%	2.43%	$14000
South Carolina	SC	0.54%	5.40%	2.64%	$7000
South Dakota	SD	0.00%	8.50%	1.20%	$9000
Tennessee	TN	0.30%	10.00%	2.70%	$7000
Texas	TX	0.22%	6.22%	2.70%	$9000
Utah	UT	0.10%	9.10%	1.10%	$25400
Virginia	VA	0.10%	6.20%	2.50%	$8000
Virgin Islands	VI	0.00%	6.0%	1.00	$21800
Vermont	VT	0.80%	6.50%	1.00%	$8000
Washington	WA	0.38%	6.02%	--%	$31400
Wisconsin	WI	0.00%	8.90%	3.25%	$10500
West Virginia	WV	1.50%	7.50%	2.70%	$8000
Wyoming	WY	0.27%	9.03%	--%	$20100