Assume the FUTA tax rate is 0.6% and the SUTA tax rate is 5.4%. Both taxes are applied to the first $7,000 of an employee's pay. What is the total unemployment tax an employer must pay on an employee's annual wages of $40,000 ? 1. $2,400 2. $420 3. $42 4. $0, employers do not pay unemployment tax 5. $0, employee's wages exceed the $7,000 maximum