This explanation will be using the 2019 rate of .006. The Federal Unemployment Tax(Futa) is to be paid by all employers that had payroll withholding.
- The first thing you will need is to look at each quarters separately(there are 4). You are looking for all paid employees. Any amount over $7000 for each employee will not be used, so if someone (employee 1)has $10,000 for the first quarter, you will only use the maximum which currently is $7000. If another employee(employee 2) had $3000 for the first quarter you will use that total sum, because anything up to $7000 or less will be used. But if it’s over $7000 only take the first $7000 as a max.
- So now you have employee 1 with $7000 and employee 2 with $3000. Write this down!
- Multiply each employees amount by the .006
- Employee 1: $7000 x .06= $42; Employee 2: $3000 x .006=$18.
- Your Futa for the first Quarter is $60.
