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Computing the tax. The FUTA tax is imposed at a single flat rate on the first $7,000 of wages that you pay each employee. Once an employee's wages for the calendar year exceed $7,000, you have no further FUTA liability for that employee for the year. The FUTA tax rate is 6 percent. That is the tax rate that applies to the first $7,000 in wages paid to each of your employees during the year. Credit for state unemployment taxes. You can generally claim credits against your gross FUTA tax to reflect the state unemployment taxes you pay.
Once you pay federal unemployment tax on the first $7,000 paid to each employee for the year, you owe no more FUTA tax on those employees for the year. Calculate Social Security tax at 6.2 percent of taxable wages paid to each employee, up to $106,800 for the year, at the time of publication; see Circular E.