Since the SUTA rates changes are made at the end of each year, the available 2022 rates were used for FUTA and SUTA. Note: For this textbook edition the rate 0.6% was used for the net FUTA tax rate for employers. Example 5-11 To illustrate the tax saving that may be realized as a result of making voluntary contributions, consider the following case of Krane Company, which is subject to the unemployment compensation law of a state that uses the reserve-ratio formula to determine experience ratings. The following contribution rate schedule applies for 2024: For the three 12 -month periods ending on June 30, 2023, the company had an average annual taxable payroll of $330,000. This is the base that the state uses as the average payroll. As of June 30,2023 , the credits to the employer's account exceeded the benefits paid by $6,800. Thus, the 2023 reserve ratio is 2.06 percent ($6,800$330,000), which would result in the assignment of a 4.4 percent tax rate, as shown in the preceding table. If the employer's 2024 total taxable payroll were $390,000, the SUTA contribution would amount to $17,160. If Krane Company makes a voluntary contribution into the state fund within the time period specified by the state law, the tax for 2024 will be less. For example, if the company contributes $460, the reserve ratio will be 2.2 percent ($7,260$330,000). As a result, the tax rate will be reduced to 3.8 percent, with the following savings realized in 2024 : As of June 30, 2022 (the computation date for the 2023 tax rate), Sanchez Company had a negative balance of $1,290 in its unemployment reserve account in State A. The company's average payroll over the last three 12 -month periods amounted to $550,000. The unemployment compensation law of State A provides that the tax rate of an employer who has a negative balance on the computation date shall be 7.2% during the following calendar year. Using the tax rate schedule presented below, compute the following: Using the tax rate schedule presented below, compute the following: a. The smallest voluntary contribution that Sanchez Company should make in order to effect a change in its tax rate. s b. The amount of the tax savings as a result of the voluntary contribution if Sanchez Company's taxable payroll for 2023 is $650,000. X