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 2017 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 5-7

Shu Company located in Arkansas had FUTA taxable wages of $130,000 and SUTA taxable wages (on first $12,000) were $210,000 with a 0.9 percent SUTA tax rate. The total unemployment taxes that Shu Company is liable for are:

FUTA tax $130,000 0.6%	=	$780
SUTA tax $210,000 0.9%	=	1,890
Total unemployment taxes		$2,670

During the year, Plum Company has a SUTA tax rate of 4.8%. The taxable payroll for the year for FUTA and SUTA is $140,000. Compute:

Round your answers to the nearest cent.

a. Net FUTA tax	$__________
b. Net SUTA tax	$_________
c. Total unemployment taxes	$__________