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Federal Unemployment Tax Act (FUTA) Increases for 2012 – 2013


Almost all private sector employers pay federal and state unemployment insurance taxes on wages paid.  The federal tax is normally 6%, however, in the State of California employers receive a credit of 5.4% for payments made for state unemployment insurance (UI) taxes.  Thus making the effective Federal tax rate .6% on the first $7,000 paid to each employee.

The Problem:

When a state UI funds are depleted (as they are currently depleted in California), the state draws from a Federal loan account.  If such loans are not repaid within two years, the Federal government thereby increases the percentage of FUTA tax paid by the employer.  The Federal government does not notify the state as to the increase until the end of the year, which is why many employers are paying large tax balances at the end of the year.


An employee has worked for your company all year in 2012 earning wages of $30,000.  Your company paid in 2012, $42 of FUTA tax ($7,000 x 0.6%) on the first 7,000 earned by the employee.  Here is where the surprise comes! Because the State of California has failed to repay the Federal government loan, your company will pay an additional 0.6% on the first $7,000 earned by the employee, raising the effective FUTA tax total to $84.

Due to the tax increase not being accessed until the end of the year explains why your company has been assessed additional taxes due on January 31, 2013.

What to Expect for 2013:

Employers in the State of California can expect the same increase in FUTA tax for the year of 2013.  This means that again additional FUTA tax could be assessed and payable in January 2014.

APS will be there when you need us…

It’s 2:45pm on a Friday afternoon buy cialis tabs and you are terminating an employee but don’t know how much to issue the final check for because of taxes.  You are in a bind and we understand that.  APS will be there when you need us to accommodate any of your urgent payroll needs such as breakdowns for termination checks, questions about payroll taxes, or inquiries to employee benefits.  

Or let’s say it’s Friday morning and you forgot to report your payroll hours and your employees will be in within an hour to pick up their payroll checks.  APS offers alternative services to insure that you are handling your payroll obligations and won’t let your employees down.  We can either provide you with tax breakdowns so that you can issue your employees checks right away or we can rush your payroll processing so that you can receive your checks the same day (for a small additional fee).

Although our turn-around time is 24 hours, we are here to accommodate your most unexpected and urgent payroll needs.  APS will provide you the attention your business deserves and the professionalism you expect.

To Courier or Not to Courier…

Save yourself some time and hassle. 

Receive your payroll by noon the day after you submit it!

 Having your payroll delivered by courier saves writing an evaluation report you the inconvenience of leaving your place of business to pick it up or possible delays of mail service.  The courier service is fast, secure, and dependable.  Make your business more efficient in no time.

 Call APS today to talk about the specifics.

Direct Deposit…it's convenient, fast, and reliable.

 Ever have your employees rush you to finish payroll on an already busy Friday?  Leave those worries and headaches in the past with Direct Deposits

Offer your employees literature review for dissertation the convenience knowing their payroll is already in their bank accounts the morning of payroll without them having to drive down to their banks or wait in line to make their deposits. 

It’s just as good as cash and most banks will make the funds available a day sooner.  This allows your employees immediate access to their paycheck . 

Please call us at (714) 696-7220 for more details.

No business is too small…

Think your business is too small for payroll service?  Think again!  

APS specializes in meeting the needs of small businesses.  Let us worry about the finite details of payroll taxes and quarterly filings so you can concentrate on growing your business.  

We dedicate ourselves to providing focused and personal attention so you always feel confident that we take your interests seriously.  

Whatever the size of your business, either one employee or hundreds, we are here and ready to serve you.

Have a great weekend!