Which wage base is applicable for FUTA tax?

The applicable wage base for FUTA (Federal Unemployment Tax Act) tax is $7,000. This means that the first $7,000 of each employee's wages is subject to the FUTA tax. Employers are responsible for paying this tax, which funds unemployment compensation to workers who have lost their jobs. It is important for payroll professionals to keep this base in mind when calculating FUTA liabilities for their employees, as any wages beyond this amount for an employee do not incur additional FUTA tax.

This wage base is set at $7,000 and has remained the same since 1983, illustrating stability in this area of federal taxation. Understanding this limit helps in accurate payroll processing and compliance with tax regulations.