The State Unemployment Tax Act, better known as SUTA, is a form of payroll tax that all states require employers to pay for their employees. SUTA is a counterpart to FUTA, the federal unemployment insurance program.

ONLEY COMPANY, INC. Employee Payroll Register For Period Ending January 8, 20--
	EARNINGS	DEDUCTIONS									NET PAY
Name	Gross	OASDI	HI	FIT	SIT	SUTA	CIT	SIMPLE	Grp. Ins.	Health Ins.	Ck. No.	Amount
Mangino, R.	$740.00	$45.88	$10.73	$81.00	$22.72	$	$14.62	$20.00
Flores	1,058.80	65.65	15.35	158.00	32.51		20.91	50.00
Palmetto, C.	685.30	42.49	9.94	32.00	21.04		13.53	40.00
Waters, R.	1,045.35	64.81	15.16	70.00	32.09		20.65	60.00
Kroll, C.	952.00	59.02	13.80	102.00	29.23		18.80	20.00
Ruppert, C.	837.50	51.93	12.14	41.00	25.71		16.54	40.00
Scott, W.	780.00	48.36	11.31	26.00	23.95		15.41	50.00
Wickman, S.	807.69	50.08	11.71	86.00	24.80		15.95	50.00
Foley, L.	1,233.16	76.46	17.88	79.00	37.86		24.35	30.00
Olney, M.	1,500.00	93.00	21.75	89.00	46.05		29.63	80.00
Totals		$597.68	$139.77	$764.00	$295.96	$	$190.39	$440.00			----

The Federal Unemployment Tax Act (or FUTA) is a United States federal law that imposes a federal employer tax used to help fund state workforce agencies. Employers report this tax by filing an annual Form 940 with the Internal Revenue Service.

Requirements;

1. Net FUTA tax: Since this is the first pay period of the year, none of the employees are near the $7,000 ceiling; therefore, each employee’s gross earnings is subject to the FUTA tax. (The employer rate is 0.6%)

2. SUTA tax: Since Olney Company is a new employer, Pennsylvania has assigned the company a contribution rate of 3.6785% on the first $9,750 of each employee’s earnings.