- [Instructor] The State Unemployment Tax Act,
better known as SUTA,
is a form of payroll tax
that all states require employers to pay
for their employees.
SUTA is a counterpart to FUTA,
the federal unemployment insurance program.
Like federal unemployment insurance programs,
the state unemployment insurance program
sets a limit to the wages taxed.
So that's known as the taxable wage base.
The taxable wage base varies from state to state.
Now, as a business, you're going to have to pay SUTA taxes
on all of your employees.
But you need to be aware that not all states
actually refer to the unemployment tax as SUTA.
All states have it,
but sometimes, a state may call it something else.
For example, in Florida,
the tax is called the reemployment tax.
In other states, it might be referred to
as state unemployment insurance, or SUI, SUI.
Whatever the case,
once you've started a business,
and you have employees,
you're going to have to go through and register for SUTA.
So you'll search for your state's
Department of Labor website.
It'll look something like this.
Not particularly sophisticated in most cases,
as state websites generally aren't,
and you'll go through and find the place
where you're going to file your business taxes.
We'll click File Our Taxes here,
and then you'd want to go through
and create an account or register for an account.
The process of creating these accounts
will differ from state to state.
Notice though, we actually have
two different account creations.
If we were a claimant, somebody who's unemployed,
we'd create an account.
In our case, we're more likely to be interested
in creating an account as an employer.
Now, I'm not going to go through the process
because it differs from state to state,
but it's fairly straight forward,
not all that dissimilar to creating an EFTPS account.
The key is make sure you do this
before you start paying your payroll each week.
Otherwise, you're going to have to go through
and create the account,
pay those SUTA taxes in arrears,
and it'll be a real headache.
So do this at the start
in order to avoid problems.
Each quarter, you're going to have to pay SUTA.
It'll be a reasonable large hit to your bottom line,
or to your profit and loss.
So be aware of that, and budget accordingly.
Now, the other point to note,
as I alluded to earlier,
is that every state has a base level of wages
on which you have to pay SUTA.
So it's generally anywhere from, say 10 to $20,000.
For example, the taxable wage base in Oklahoma,
in 2016, was $17,500.
That means you pay SUTA on the first $17,500 in wages
for every employer, every year.
If you're a new employer in Ohio, as an example,
running a non-construction business,
you'd have a wage base of $9,000.
The other part of the SUTA tax
is the rate that you have to pay.
In Ohio, in 2016,
the base rate is 2.7%.
That rate will change over time,
depending on your history as an employer.