Futa — Payroll Definition

What is Federal Unemployment Tax (FUTA)?

The standard FUTA rate is 6.0% on the first $7,000 of FUTA wages for each employee. An employer that qualifies for the full state-unemployment credit can have a 0.6% effective rate, but credit-reduction rules can raise the amount in affected states and not every payment is taxable FUTA wages. FUTA is generally an employer tax rather than an employee withholding item.

How to apply this payroll definition

Locate the label beside its current-period amount, taxable-wage basis, and year-to-date total. Compare it with prior genuine statements, benefits materials, the employer's payroll documentation, and the primary source linked on this page. The same abbreviation can carry a different employer-specific meaning.

What the label does not prove

A familiar term or plausible amount does not authenticate a pay statement or confirm identity, employment, wages, deductions, tax compliance, or eligibility. Ask the verified payroll contact about an unknown code. Use current agency instructions or a qualified adviser when a rate, filing, benefit, garnishment, or legal decision depends on the answer.

Browse all payroll definitions or use the pay-statement codes guide.