State Unemployment Insurance tax?

[Former Member]

Hi

  What is the Contribution Rate towards State Unemployment Insurance tax in US-Payroll .i.e is Tax type 7?      Is it 6.8%?       If it is 6.8% then the total 6.8% is contributed by Employee alone or both Employee and Employer ?  Then what is the difference between tax type 7, Tax type 10(Employer Unemployment tax) and tax type 20(Employee Unemployment tax)? What is the relationship between Tax type 7, 10, 20 and IT 0209?

Regards

Rakesh

[Former Member · Accepted solution]

Rakesh,

The SUI rates vary from state for example OH state have very high slab of Unemployment tax where as MI and NC are little lesser.  These are notified to the clients whenever there is a change in the percentage and slabs state wise.  Generally this is contributed by the employer till the slab is met and then discontinued.  Where as there some states as mentioned by Ashish which deduct UI from EE too.

BR

Upen

[Former Member · Accepted solution]

Hi Upendra,

                             How these tax percentage changes  are notified to clients, Is it through BSI Tubs?

Regards

Rakesh

[Former Member · Accepted solution]

Rakesh,

There will be notifications given by the authorities like IRS and other State authorities whenever need arises to all the entities.  BSI and TUBS are only to incorporate those changes into SAP for a meaningful result.

and for your other question,

What is this Tax Base $9500? So Tax type 10 is also called as FUTA(Federal Unemployment tax), Is it so?Is FUTA  totally contributed by Employer only or both Employee and Employer?  If FUTA  percentage is contributed equally between Employee and Employer or varies state to state?

Tax Base or slab is the amount upto which the ER has to the pay the UI ie. if the FUTA % is 5% for slab of $ 1000 ER will pay 5% of EE's gross every pay period till it reaches $1000 and is discontinued there after and recommences next financial year.

FUTA - Federal Unemployment Tax Act and SUTA are called with tax types in SAP./ or in the other way every tax is attached to a tax type example 01 withholding tax, 03 EE Social Security, 04 ER Social Security, 05 & 06 Medicare as above you can find these in T5UTT table.

The EE Unemployment contribution in states applicable will be same as employer and will be through tax type 20 and varies state to state....

BR

Upen

[AshishBhati]

Hi Rakesh,

Every state have different SUI tax rates and their SUI tax base wages for year 2014. Check the APA site for the latest tax rate and tax wage bases. Like for Indiana the SUI tax rate is from .5% to 9.4% and for year 2014 the tax base is $9500. Check this link

http://www.americanpayroll.org/members/stateui/state-ui-2/

Now it depends on States if they want employers to file SUI, if yes then tax type 07(State) i.e. (SUTA) and tax type 10 (Fed) is being configured and if not then only tax type 10 is configured to calculate the federal unemployment i.e. (FUTA). Now these are Employer liabilities and cannot deduct it from employees paycheck but in some states like AL, NJ and PA require employers to take unemployment tax deductions from employees. and in that case tax type 20 and tax type 10 is required.

IT0209 - you need to configure all the work-sites in respect to calculate unemployment tax.

Hope this information helps a bit.

Thx,

Ashish

[Former Member]

Hi Ashish,

                     What is this Tax Base $9500? So Tax type 10 is also called as FUTA(Federal Unemployment tax), Is it so?Is FUTA  totally contributed by Employer only or both Employee and Employer?  If FUTA  percentage is contributed equally between Employee and Employer or varies state to state?

Regards

Rakesh