Since the SUTA rates changes are made at the end of each year and there is much discussion about changes to the FUTA rate, the available 2016 rates were used for FUTA and SUTA.

Note: For this textbook edition the rate 0.6% was used for the FUTA tax rate for employers.

Example 5-6

The Iqbal Company of Georgia had a FUTA taxable payroll of $215,600 and a SUTA taxable payroll of $255,700 with a 5.6 percent SUTA tax rate. The company would pay unemployment taxes of:

FUTA $215,600 0.006	=	$1,293.60
SUTA $255,700 0.056	=	$14,319.20
TOTAL TAXES		$15,612.80

During 2017, Jeff Smallwood worked for two different employers. Until May, he worked for Rowland Construction Company in Ames, Iowa, and earned $21,970. The state unemployment rate for Rowland is 4.6%. He then changed jobs and worked for Ford Improvement Company in Topeka, Kansas, and earned $28,030 for the rest of the year. The state unemployment rate for Ford is 5.1%. Determine the unemployment taxes (FUTA and SUTA) that would be paid by each company. Round your answers to the nearest cent.

Use Figure 5.1 to determine SUTA caps in Iowa and Kansas

a. Rowland Construction Company	$
b. Ford Improvement Company	$