Updating Your State Unemployment (SUTA) Rate

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Updating Your State Unemployment (SUTA) Rate

Background

Most business owners receive an annual determination of their state unemployment (SUTA) tax rates. These rates are based on their company’s unemployment claims “experience.” For example, if you lay off several employees and they collect unemployment, you may receive a rate increase notice due to this change in your experience rating.  See a full definition of SUTA in our glossary.

For further reading, see our related article What is SUTA?

For specific unemployment tax information in your state, see State Tax Account Help.

How To Update Your SUTA Rate in Patriot Software

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 individual experience ratings.

When you receive a SUTA rate change notice, you will need to update this custom tax rate in Patriot Software to calculate this tax correctly. Please note: Our software requires the rate be entered as a percentage. If your state has given you your SUTA rate as a decimal, you will want to convert this to a percentage by moving the decimal two places to the right. (Ex: .027 = 2.7%)

Here’s how:

  • Settings > Payroll Settings > State Unemployment Rates
  • 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).
  • Choose an Effective Date from the dropdown. Refer to the dates on the SUTA notice you received, and select the correct effective date.
  • Enter your new SUTA rate in the Tax Rate field. Make sure this rate is a percentage.
  • Click Save.
  • 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.  Click Accept.

A history of previously entered SUTA rates will display, including the rate you just entered.

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