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FUTA stands for Federal Unemployment Tax Act and it is a federal law that requires employers to pay an additional amount of tax on top of the federal income tax and other payroll taxes.
The Federal Unemployment Tax Act (FUTA), with state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs.
The Maximum Weekly Benefit Amount (MWBA) in the Virgin Islands for the benefit year beginning January 1, 2022, is $642.00 and the Taxable Wage Base (TWB) for employer contributions is $30,800.00.
Minimum Wage Rate in the U.S. Virgin Islands is $10.50 per hour. Time and a half of the regular hourly rate must be paid for all hours worked over 8 hours each day and for over 40 hours in any work week including any hours worked on the 6th and 7th consecutive day of work.
FUTA is an acronym for the Federal Unemployment Tax Act, similar to State Unemployment Tax (SUTA, and is a federal law requiring employers to pay unemployment tax.
*FUTA is calculated on the first $7,000 of wages per year per employee. Example: XYZ Sample Company has 100 employees in California in 2022. As such, XYZ Sample Company's FUTA tax due on each employee's wages paid in 2022 would be $42 ($7,000 x 0.6%), or a total of $4,200 ($42 x 100).
SUTA refers to the taxes paid at the state level, but there is also a federal equivalent paid at the federal level, called the Federal Unemployment Tax Act, or FUTA. FUTA taxes go into a fund that covers the federal government's oversight of the states' individual unemployment insurance programs.