---
title: Understanding Federal Unemployment (FUTA) Tax | Complete Payroll
description: Want to figure out if you have to pay Federal Unemployment (FUTA) Tax? This 3-part test should clear it up for you.
---

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# [Understanding Federal Unemployment (FUTA) Tax | Complete Payroll](https://www.completepayroll.com/blog/determine-if-you-must-pay-federal-unemployment-futa-tax)

 Written by [Complete Payroll](https://www.completepayroll.com/blog/author/complete-payroll) | Jul 26, 2017 11:50:00 AM

The [Federal Unemployment Tax Act](https://en.wikipedia.org/wiki/Federal_Unemployment_Tax_Act), with state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs. Most employers pay both a federal and a state unemployment tax.

Federal unemployment tax is only paid by the employer - it's not withheld from the employees' wages, unlike state, federal, OASDI and other taxes.

> There's a cool resource from the United States Department of Labor that lists all of the state unemployment agencies. [Click here to check it out](https://workforcesecurity.doleta.gov/unemploy/agencies.asp).

### Do you have to pay Federal Unemployment Tax?

Here's a 3-part test...

**1. THE GENERAL TEST**

You’re subject to FUTA tax in 2017 on the wages you pay employees who aren't farmworkers or household workers if:

- You paid wages of $1,500 or more in any calendar quarter in 2016 or 2017, or
- You had one or more employees for at least some part of a day in any 20 or more different weeks in 2016 or 20 or more different weeks in 2017.

**2. THE HOUSEHOLD EMPLOYEES TEST**

You’re subject to FUTA tax if you paid total cash wages of $1,000 or more to household employees in any calendar quarter in 2016 or 2017. A household employee is an employee who performs household work in a private home, local college club, or local fraternity or sorority chapter.

**3. THE FARMWORKERS TEST**

You’re subject to FUTA tax on the wages you pay to farmworkers if:

- You paid cash wages of $20,000 or more to farmworkers during any calendar quarter in 2016 or 2017, or
- You employed 10 or more farmworkers during at least some part of a day (whether or not at the same time) during any 20 or more different weeks in 2016 or 20 or more different weeks in 2017.

[Click here](https://taxmap.ntis.gov/taxmap/pubs/p15-013.htm) for a very comprehensive resource on FUTA and how it works.

*Source: [IRS Tax Map](https://taxmap.ntis.gov/taxmap/tmhome.htm)*

* *

> Check out our comprehensive [employer's guide to payroll taxes](https://www.completepayroll.com/employer-guides/payroll-taxes) - a structured and simple overview of what employers need to know about the taxes that flow through payroll - on both the employer and employee side.

[View full post](https://www.completepayroll.com/blog/determine-if-you-must-pay-federal-unemployment-futa-tax)

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