Calculate FUTA Tax Rates
As the employer, you will have to file Form 940. By the way, the whole point of this tax is to collect funds to pay to employees who have lost their jobs. We have all heard of someone collecting unemployment haven’t we? Well this money did not just magically appear. FUTA tax is filed annually using tax form 940. There is a limit on the total amount due and if you owe more than the limit you will have to pay a penalty and interest charges. To avoid penalties and interest charges the business will have to submit deposit payments in advance.
State unemployment tax is a tax that employers pay. The payroll tax usually refers to two different kinds of taxes. Employers are required to withhold these taxes from their employees’ pay. This is also called withholding. The two types are pay as you earn (PAYE) or pay as you go (PAYG) tax.