FUTA

What does FUTA stand for?

Federal Unemployment Tax Act

A financial acronym that represents the tax paid to the IRS by the employer to provide funds for paying unemployment compensation to workers who have lost their jobs.

The FUTA rate that employers have to pay is 6% of the first $7,000 per year of each employee's wages or salary. However, employers can take a credit up top 5.4% of taxable income if they pay state unemployment taxes. Therefore the maximum amount paid per employee is $420 and the minimum is $42.

Example

"So once the employee's wages exceed $7,000, the employer doesn't have to pay the FUTA for that employee any longer?
Correct."

Related Slang

Usage

Last Updated: February 11, 2015

FUTA definition

This page explains what the acronym "FUTA" means. The definition, example, and related terms listed above have been written and compiled by the Slangit team.

We are constantly updating our database with new slang terms, acronyms, and abbreviations. If you would like to suggest a term or an update to an existing one, please let us know!