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What is Federal unemployment tax
Federal unemployment tax (FUTA) requires the payment of taxes to provide benefits for workers during periods of temporary unemployment. This is paid ONLY by employer. It can't be withheld from the pay of employees. Set by federal legislation. Current rate is 6.2% for the first $7,000 of wages paid to every employee during calendar year. Employer may take a credit of up to 5.4% for timely contributions to state unemployment funds. This leaves an effective FUTA rate of only 0.8%.
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The trial balance of Bellemy Fashion Center contained the following accounts at November 30, the end of the company’s fiscal year.
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