Article applies to Basic Payroll, Full Service Payroll
FUTA tax is 6% for each employee, but most companies receive a credit of 5.4% if they pay their SUTA taxes, resulting in a 0.6% FUTA tax rate per employee.
At the end of each quarter, we calculate a potential tax adjustment based on the FUTA worksheet of the 940. We then determine, based on payments to the state, whether or not employees are indeed subject to the entire 6% of FUTA. These adjustments will be reflected as “System Edits” at the end of the year.
You can view system edits in your payroll details report by going to Reports > Payroll > Payroll Details.
Select the year 1/1/XX – 12/31/XX
Select: “System Edits” as the source. This report will also reflect all adjustments for any states that are part of the FUTA credit reduction for that year.
Also see our help article, “How to Find Year-to-Date Payroll Totals.”