Unemployment Insurance Tax (FUTA/SUTA): Wisconsin

Federal law and guidance on this subject should be reviewed together with this section.

Author: Vicki M. Lambert, The Payroll Advisor

Summary

• Employers must consider numerous factors to determine whether workers are employees who must be covered by unemployment insurance (UI), or independent contractors who may be excluded from coverage. Special rules apply to loggers, truckers and those working for nonprofit or government organizations. See Determining Unemployment Tax Coverage.
• The term wages refers to every payment an employer makes, or is expected to make, directly or indirectly to an individual for personal services. The form of the compensation is irrelevant (unless it specifically qualifies for exclusion, as in the case of expense reimbursements or employee moving expenses). Meals and lodging may be nontaxable if certain criteria are met. Tips are only taxable to the extent an employee declares and accounts for them in writing to the employer. See SUI Taxable Wages.
• After an initial, three-year tax-rating period for new employers, the Department of Workforce Development (DWD) computes an employer's experience rate using several factors. See Experience Rating Method.
• Wisconsin employers may make voluntary contributions to lower their UI tax rate by November 30 of each year. Employers that pay wages through a common paymaster should report those wages through the common paymaster. To qualify as a common paymaster, certain requirements must be met. See Voluntary Contributions; Joint or Combined Accounts.
• All employers required to make UI contributions must file quarterly wage and contribution reports. See Quarterly Reporting Requirements.
• An employer's account will be charged for benefit overpayments if it fails to promptly and adequately respond to agency requests for information about a claim. See Benefit Overpayments.
• Every employer of one or more employees working in Wisconsin is required to keep an accurate work record for each employee including specific information. Records may be kept in machine-readable format so long as the employer provides the UI Division with information necessary to retrieve the records. See Recordkeeping Requirements.