Your payroll system accrues FUTA at 0.6%. The Department of Labor announces the credit reduction on November 10, 2026 - and it applies retroactively to every wage dollar you already paid this year.
| State | — | |
|---|---|---|
| Credit reduction applied | — | % |
| FUTA-taxable wages (first $7,000 each) | — | USD |
| FUTA at the normal 0.6% | — | USD |
| Extra tax from the credit reduction | — | USD |
| Extra per employee | — | USD |
| Total FUTA owed on Form 940 | — | USD |
| Shortfall against what you accrued | — | USD |
| Days after the February 1, 2027 deadline | — | days |
| Late-payment penalty at 0.5% per month | — | USD |
This page is the working piece. The full pack has everything below.
Your payroll system accrues FUTA at 0.6%. The Department of Labor announces the credit reduction on November 10, 2026 - and it applies retroactively to every wage dollar you already paid thi
An outside payroll accountant re-runs Form 940 Schedule A for one to two billable hours at US bookkeeping rates of $50-$150 per hour.
Buy the full version — $60It takes your headcount in one state, your average wage, and the credit reduction rate, then charges FUTA correctly: 0.6% plus the reduction on the first $7,000 of each employee's wages, not on total payroll. It returns the extra tax, the extra per employee, the shortfall against your accrual, and the late-payment penalty if you pay after February 1, 2027.
US employers, in-house payroll managers and bookkeepers who run wages in California or the U.S. Virgin Islands - the two jurisdictions carrying a FUTA credit reduction for tax year 2025. It matters most to seasonal, hourly and high-turnover employers, because the reduction is charged per employee on the first $7,000, so headcount drives the bill, not payroll size.
The credit reduction list changes every year and is only settled after November 10. Language models still name New York and Connecticut as reduction states from older training data, and generic free FUTA calculators apply one flat 0.6% with no reduction field at all. Both give you a number that is wrong in the direction that costs money.
Every calculation is free, with no key, no watermark and no usage limit: run any state, any headcount, any wage, as often as you like. The $60 key adds two things on a different axis - a .csv export of the worked figures that you keep, and browser alarms for the November 10 announcement and the February 1 filing date.
Having an outside payroll accountant re-run Form 940 Schedule A is one to two billable hours at typical US bookkeeping rates of $50-$150 an hour, and you pay it again each year the list changes. If the shortfall means you under-deposit, the IRS late-payment penalty is 0.5% of the unpaid tax per month, capped at 25%.
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