SUTA is an acronym for the State Unemployment Tax Act. Established in 1939, this act was an effort to bounce back from the Great Depression and avoid repeats in the future. SUTA is a type of payroll tax that coincides with FUTA, the federal equivalent of SUTA. It helps support your state's unemployment fund.
Every company has to pay this tax. But like other state matters, the logistics vary from one state to the next. Your company must pay SUTA for every state you have employees. With varying tax rates, it can be a confusing endeavor.
Registering for SUTA
The first step to registering for SUTA is to get state tax numbers. That requires a lengthy application process on individual state websites. After completing the applications, you may have to wait up to six weeks to get your tax numbers.
Only after you have them can you head over to the states' SUTA websites and register. As you can imagine, registering isn't an easy process.
Consider automating the process with SUTA tax payments software to avoid the headache.
How Much Will You Pay?
Here's where SUTA gets even more confusing.
Every state's SUTA rate is different. Furthermore, states assign a range of rates to your business. Most will have an established minimum and maximum.
Newer and smaller businesses will typically pay the lower amount. You'll climb up that range as your company grows and makes more revenue.
The amount you'll pay is a percentage of every employee's earnings. Most companies will pay monthly or quarterly through withholding state income tax.
Managing SUTA Payments
SUTA is notoriously complex. It may be straightforward if you only operate in one state. But as your business expands and you move to other territories, you'll have to pay SUTA for every state you hire employees.
It's a logistical nightmare.
Fortunately, SUTA tax payments software can automate the process. Register and pay your SUTA taxes without getting into a mess of paperwork. Leave this process on autopilot and rest easy knowing that your organization is compliant.
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