What is SUI?

State Unemployment Insurance (SUI) is a tax-funded program, required by state and federal law, to provide short-term benefits to workers who have lost their job.

Is SUI a Payroll Tax?

Yes, SUI is part of payroll taxes, and the tax rate depends on a state’s requirements. Employers must pay SUI tax, except in cases exempted by law, for their employees’ basic needs until they secure a new job. To qualify for unemployment benefits, workers must comply with state unemployment insurance guidelines. FUTA is a federal contribution to the fund, and a company must pay unemployment tax on the first $7,000 an employee earns. Companies must adhere to the tax rates set by individual states on their state requirements. SUI tax rates vary depending on location and are calculated based on factors such as former employees filing for unemployment claims. The FUTA and SUI taxes are tax-deductible for employers, and a majority of these taxes can be entered on line 23 of the Schedule C form when filling out annual tax return forms.