Payroll Help

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How to Update Your State Unemployment (SUTA) Rate

Background

Most business owners get a notice each year with their updated state unemployment (SUTA) tax rate. This rate is based on your company’s unemployment claims history—also known as your “experience rating.” For example, if you lay off several employees and they file for unemployment benefits, your rate could increase as a result.

While Patriot Software automatically updates all standard tax rates (e.g., federal income tax, federal unemployment, state/local, etc.), the payroll software does not automatically update SUTA rates, since they are based on your company’s experience rating.

When you receive a SUTA rate change notice from your state unemployment tax agency, you will need to update this custom tax rate in the payroll software to calculate your SUTA tax liabilities correctly. If you have any questions about what your rate is, please contact your state’s Department of Labor. For specific state contact info, see our help article, “State Tax Account Help.”

How Enter Your SUTA Rate

  1. Go to Settings > Payroll Settings > State Unemployment Rates
  2. Click Edit for the SUTA rate you want to change (if you have more than one state, or your state has more than one type of SUTA rate).
  3. Choose an Effective Date from the dropdown. Refer to the dates on the SUTA notice you received, and select the correct effective date.
  4. Enter the new SUTA rate in the Tax Rate field.
  5. Click “Save.“
  6. A history of previously entered SUTA rates will be displayed, including the rate you just entered.
    Full Service Payroll:
  7. If you have Full Service Payroll, and if your SUTA rate change causes a SUTA tax adjustment for past payrolls, you will see an additional confirmation screen to preview the pending tax debit/credit to your bank account.  
  8. Click “Accept.”
  9. Please verify the rate once you click save to ensure you have entered it correctly. Entering a rate too low will result in fines and penalties from your state–and nobody wants that.

Also read, Company Payroll Tax Settings if you need to make your company exempt from SUTA taxes.

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