Last Updated: July 2026. Rates and wage bases are subject to change. Consult your state unemployment agency or a tax professional for jurisdiction-specific guidance.
Key takeaways:
- SUTA (State Unemployment Tax Act) tax, also called SUI or state unemployment insurance tax, is a mandatory employer-paid payroll tax that funds unemployment benefits for workers who lose their jobs.
- Tax rates range from 0% to over 15% depending on your state, industry, and claims history. New employers typically start between 1.0% and 4.1%.
- Taxable wage bases range from $7,000 (CA, FL, TX) to $78,200 (WA) in 2026.
- Most states require only the employer to pay. Alaska, New Jersey, and Pennsylvania also require small employee contributions.
- Paying SUTA on time reduces your federal unemployment (FUTA) rate from 6.0% to 0.6% via a 5.4% credit.
What Is State Unemployment Insurance Tax?
SUTA (State Unemployment Tax Act) tax, also called SUI (State Unemployment Insurance) tax, is a state-level payroll tax that employers pay to fund unemployment benefits for workers who lose their jobs through no fault of their own. You may also see it called reemployment tax or employment security tax, depending on the state.
Rates range from 0% to over 15% depending on the state, your industry, and your claims history, applied to taxable wages that range from $7,000 to $78,200 per employee.
It funds the weekly checks that laid-off workers receive while they look for a new job. In most states, those benefits last up to 26 weeks. Some states extend that window when unemployment is unusually high.
Generally, only employees who are laid off or lose available work qualify for benefits. Workers who quit voluntarily or are fired for misconduct typically don’t receive them, though some states make exceptions. If you think a former employee’s claim is ineligible, you can challenge it through your state’s unemployment agency.
SUTA is one of several payroll taxes employers are responsible for. For a full overview of all federal and state payroll taxes, see our guide to the types of payroll taxes.
What’s the Difference Between FUTA and SUI Tax?
The U.S. unemployment insurance system is funded at two levels: federal (FUTA) and state (SUI). They’re separate taxes with separate filings.
Federal Unemployment Tax (FUTA)
Under the Federal Unemployment Tax Act, employers pay 6% on the first $7,000 each employee earns annually. That $7,000 threshold (the “taxable wage base”) hasn’t changed since 1983. It’s reported annually on IRS Form 940.
The good news: if you pay your SUI taxes in full and on time, you typically get a 5.4% credit against FUTA. That drops the effective rate to just 0.6%, or about $42 per employee per year.
2025–2026 FUTA Credit Reductions
Some states still carry outstanding federal loans used to cover unemployment benefits during the pandemic. Employers in those states lose part of their FUTA credit.
For tax year 2025 (filed in January 2026):
- California: 1.2% credit reduction. That raises the effective FUTA rate to 1.8%, or up to $126 per employee.
- U.S. Virgin Islands: 4.5% credit reduction.
- Connecticut and New York paid off their federal loans by November 10, 2025, so they avoided credit reductions entirely. New York employers save roughly $100 per employee in 2026 as a result.
State Unemployment Insurance Tax (SUI)
On top of FUTA, you pay SUI taxes to each state where your employees work. State tax rates vary widely (from 0% to over 15%) depending on your industry, claims history, and state regulations. Each state also sets its own taxable wage base, ranging from $7,000 to over $78,000.
Who Has to Pay SUI Tax?
If your startup pays FUTA taxes, you almost certainly owe SUI taxes too. According to the IRS, state unemployment taxes apply to companies that meet at least one of these conditions:
- You hired one or more employees who worked in 20 or more different weeks in the current or previous year
- You paid at least $1,500 in wages in any calendar quarter during the current or previous year
In 47 states, employers pay 100% of SUTA. The three exceptions are Alaska, New Jersey, and Pennsylvania, where employees also contribute a small percentage through payroll deductions.
Are Any Organizations Exempt?
Some organizations are generally exempt from SUI taxes:
- Government employers
- Educational institutions
- Religious nonprofits
- Charitable organizations (501(c)(3) entities)
Wages paid to family members (parents, spouse) or employees under age 21 may also be exempt in some states. Check with your state’s unemployment insurance agency for specifics.
How to Calculate Your SUTA Tax
Your SUTA liability is straightforward: rate × taxable wages (up to the wage base).
How Your Tax Rate Works
Your rate depends on three factors:
- Industry classification: Some industries (notably construction) face higher baseline rates.
- Years in business: New employers receive a standard "new employer rate" until they build a claims history.
- Experience rating: After two to three years, your rate adjusts annually based on how many former employees filed unemployment claims against your account. More claims raise your rate; stable employment brings it down.
New employers get a standard starting rate, typically between 1.0% and 4.1% depending on the state. Once you have enough history, your rate is recalculated each year.
Calculation Example
SUTA Tax = Tax Rate × Taxable Wages Per Employee (up to the wage base)
Say your startup is in New York and you're hiring your first employees in 2026:
- New York's 2026 wage base: $17,600
- New employer rate: 4.1%
- 4.1% × $17,600 = $721.60 per employee per year
That's your annual SUTA liability for each New York employee, paid quarterly.
What About Multi-State Teams?
If your team is remote and spread across multiple states, you owe SUI taxes in every state where your employees work. That means separate registrations, separate filings, and separate rate calculations for each one.
This is where things get painful fast. Every new state hire means another .gov portal to navigate, another account to open, another set of quarterly deadlines to track. Multi-state compliance is dramatically more complex than single-state operations, and mistakes add up quickly in penalties and back taxes.
2026 SUTA Tax Rates and Wage Bases by State
The table below shows new employer rates (for non-construction businesses), experience rate ranges for established employers, and 2026 taxable wage bases. Data compiled from PayrollOrg, Ballotpedia, state agency announcements, and Nextep.
If you’re paying SUTA taxes in multiple states, use this as a starting point to estimate your liability for each one.
| State | New Employer Rate | Experience Rate Range | 2026 Taxable Wage Base |
|---|---|---|---|
| Alabama | 2.7% | 0.59%–6.19% | $8,000 |
| Alaska | 1.5% (employer); 0.50% (employee) | 1.50%–5.90% | $54,200 |
| Arizona | 2.0% | 0.03%–8.36% | $8,000 |
| Arkansas | 1.8% | 0.2%–5.1% | $7,000 |
| California | 3.4% | 1.5% - 6.2% | $7,000 |
| Colorado | 3.05% | 0.72%–10.85% + surcharges | $30,600 |
| Connecticut | 1.9% | 1.10%–9.90% | $27,000 |
| Delaware | 1.0% | 0.3% - 5.4% | $14,500 |
| District of Columbia | 2.7% | 1.0% - 7.40% | $9,000 |
| Florida | 2.7% | 0.1% - 5.4% | $7,000 |
| Georgia | 2.7% | .06% - 8.1% | $9,500 |
| Hawaii | 2.4% | up to 5.6% | $64,500 |
| Idaho | 1.0% | 0.208%–5.4% | $58,300 |
| Illinois | 3.35%–3.45% (by industry) | 0.75%–7.05% | $14,250 |
| Indiana | 2.5% | 0.5%-11.2% | $9,500 |
| Iowa | 1.0% | 0.0%-5.4% | $20,400 |
| Kansas | 1.75% | 0.0%–6.95% | $15,100 |
| Kentucky | 2.7% | 0.3%-9.0% | $12,000 |
| Louisiana | Varies by Industry | 0.09%-6.2% | $7,000 |
| Maine | 2.54% (incl. assessments) | 0.31%–6.6% | $12,000 |
| Maryland | 1.0%–2.6% | 0.3%-7.5% | $8,500 |
| Massachusetts | 2.13% | 0.83%-12.65% | $15,000 |
| Michigan | 2.7% | 0.06%–12.2% | $9,000 (standard); $9,500 if filing delinquent |
| Minnesota | Varies by Industry | 0.4%-8.9% | $44,000 |
| Mississippi | 1.0%–1.2% (by year) | 0.0%-5.4% | $14,000 |
| Missouri | 1.0% (nonprofits); 2.376% (others) | 0.0%-6.0% | $9,000 |
| Montana | Varies | 0.0%–6.12% + AFT rate | $47,300 |
| Nebraska | 1.25% | 0.0%-5.4% | $9,000 (std); $24,000 (max-rate employers) |
| Nevada | 2.95% | 0.25%-5.4% | $43,700 |
| New Hampshire | 2.7% | 1.0%-7.0% | $14,000 |
| New Jersey | 2.8% employer; 0.425% employee | 0.5% - 5.8% | $44,800 |
| New Mexico | 1.0% | 0.33%-5.4% | $34,800 |
| New York | 4.1% (incl. 0.075% RSF) | 0.0%-8.9% | $17,600 |
| North Carolina | 1.0% | 0.06%-5.76% | $34,200 |
| North Dakota | 1.03%-6.09% | 0.08% - 9.69% | $45,100 |
| Ohio | 2.7% | 0.5% - 10.2% | $9,000 |
| Oklahoma | 1.5% | 0.2%–5.8% | $25,000 |
| Oregon | 2.4% | 0.9%-5.4% | $56,700 |
| Pennsylvania | 3.82% | 1.42%-10.37% | $10,000 |
| Rhode Island | 1.21% | 0.9%-9.4% | $30,800 (std); $32,300 (negative balance) |
| South Carolina | 0.21%-1.0% | 0.06%-5.46% | $14,000 |
| South Dakota | 1.2% | 0.0% - 8.8% | $15,000 |
| Tennessee | 2.7% (first 3 years) | 0.01% - 10.0% | $7,000 |
| Texas | 2.7% | 0.25%-6.25% | $9,000 |
| Utah | Varies | 0.1%-7.1% | $50,700 |
| Vermont | 1.0% | 0.4%-5.4% | $15,400 |
| Virginia | 2.5% | 0.1%-6.2% | $8,000 |
| Washington | Varies | 0.27% - 8.15% | $78,200 |
| West Virginia | 2.7% | 1.5%-8.5% | $9,500 |
| Wisconsin | 3.05%-3.25% | 0.0%-12.0% | $14,000 |
| Wyoming | Varies | 0.0%-8.5% | $33,800 |
Visit your state's Department of Labor for the latest information.
Key 2026 Changes Worth Knowing
- Washington leads with the highest wage base at $78,200, up $5,400 from 2025.
- New York increased its wage base from $12,800 to $17,600 and eliminated the Interest Assessment Surcharge after paying off its federal UI loan, saving employers roughly $100 per employee.
- Iowa significantly reduced its wage base from $39,500 to $20,400 following legislative changes.
- California remains on its highest rate schedule ("F") with a 15% solvency surcharge, keeping employer costs elevated.
- New Jersey transitioned from Column D to Column C rates (0.5%–5.8%) as of July 2025, giving employers some relief.
- Colorado, Connecticut, Delaware, Kansas, and Nevada all increased their wage bases for 2026.
How Do You Register as a New Employer?
Before you can file and pay SUI taxes, you need to register with each state’s unemployment insurance agency. If you have employees working in multiple states, that means separate registrations for every state.
The process generally looks like this:
- Go to your state’s Department of Labor website or unemployment agency portal.
- Complete the employer registration form. You’ll need your EIN, business structure details, expected headcount, and industry classification (NAICS code).
- Receive your employer account number and new employer tax rate.
Some states require registration before you make your first hire. Check your state’s requirements at the U.S. Department of Labor’s state directory before posting job listings. Check out our step-by-step registration guide for more info.
How Do You File and Pay SUTA Tax?
Employers typically file and pay SUI taxes quarterly. Here are the standard deadlines:
| Quarter | Period | Due Date |
|---|---|---|
| Q1 | January - March | April 30th |
| Q2 | April - June | July 31st |
| Q3 | July - September | October 31 |
| Q4 | October - December | January 31 |
Most states allow (or require) electronic filing through their online portals. You'll report total wages paid, taxable wages per employee, headcount, and the SUTA tax owed.
In Alaska, New Jersey, and Pennsylvania, you'll withhold the employee portion from paychecks and remit it alongside your employer contribution.
For state-specific filing guides, see our state payroll tax hub.
What Happens If You Miss a SUI Tax Deadline?
Penalties and interest charges. Every state handles them differently, but they all add up fast.
On the federal side, the IRS typically charges 5% of unpaid tax per month for late filing, plus 2% to 15% penalties for late payment. These compound quickly. For a cash-strapped startup, a single missed quarterly filing can snowball into a much bigger problem by the time you catch it.
See the full 2026 payroll tax deadline calendar to make sure nothing slips.
Put Your State Taxes on Autopilot with Warp
Managing SUI taxes across multiple states is a real time sink. Every new hire in a new state means another registration, another filing schedule, and another set of rules to track.
Warp eliminates this complexity by automating your state payroll tax compliance end-to-end. Here's how:
Automatic State Registrations
When you add an employee in a new state, Warp opens the necessary state tax accounts on your behalf. That includes your unemployment insurance account. You’ll never need to navigate another state government website to get a withholding ID or SUI employer number.
Automated Tax Filings
Warp prepares and files all recurring payroll tax forms for you, including quarterly SUI reports, federal Form 941s, and annual W-2/1099 filings. Founders no longer need to track filing deadlines across every state where they have employees.
Tax Notice Resolution
If a tax notice or discrepancy arises, Warp handles it. The platform resolves 80% of tax notices instantly by working directly with state agencies so you can focus on building your business instead of fielding calls from the Department of Labor.
Built for Multi-State Startups
Unlike legacy payroll tools designed for single-location small businesses, Warp is purpose-built for venture-backed startups hiring across the country. The platform automates the compliance that other solutions don't handle, including state tax registrations, unemployment insurance, annual reports, and ongoing notices.
As one founder described it: "Warp gives me peace of mind. I don't have to worry about compliance or tax notices. I've gotten back so much time from not having to worry about different state tax agencies or changes in regulations."
Ready to stop worrying about SUI compliance? Request a demo to see how Warp can save you 6+ hours per month on payroll administration.
Frequently Asked Questions
Why am I paying SUI tax?
If you’re an employer, you pay SUI tax to fund your state’s unemployment insurance program, which provides temporary income to workers who lose their jobs. If you’re an employee seeing “SUI” on your paycheck, you’re likely in Alaska, New Jersey, or Pennsylvania. Those are the only three states where employees also contribute. Everywhere else, the employer pays 100% of it.
Is SUI the same as FUTA?
No. They’re separate taxes with separate filings. FUTA is the federal unemployment tax: 6.0% on the first $7,000 of wages, though most employers effectively pay just 0.6% after the standard credit. SUI is the state-level version, with rates and wage bases that vary by state. Both fund unemployment benefits, but they work independently. Note that employers in “credit reduction” states (states that haven’t repaid federal UI loans) may owe additional FUTA above the 0.6% effective rate.
What does SUI stand for?
SUI stands for State Unemployment Insurance. You might also see it called SUTA (State Unemployment Tax Act) or just UI (Unemployment Insurance). They all refer to the same tax.
Who pays SUI: employer or employee?
In 47 states, only the employer pays SUI. Alaska, New Jersey, and Pennsylvania are the exceptions, where employees contribute a small percentage through payroll deductions. For 2026, the employee SUI rates in those states are: Alaska 0.50% (on $54,200), New Jersey 0.3825% (on $44,800), and Pennsylvania 0.07% (on $10,000).
What is SUTA on my paycheck?
If you live in Alaska, New Jersey, or Pennsylvania, the “SUTA” or “SUI” line on your pay stub is your employee contribution to the state unemployment insurance fund. In every other state, SUI is paid entirely by your employer and won’t show up on your paycheck.
How is my SUI rate determined?
Two things: your state’s base rate schedule and your company’s “experience rating.” New employers get a standardized starting rate (usually 1.0% to 4.0%, depending on the state and industry). After a few years, your rate adjusts annually based on how many former employees filed unemployment claims against your account. Layoffs push your rate up. Stable employment brings it down.
