Calculating FUTA

This diagram illustrates the flow of FUTA calculation:

This diagram illustrates the flow of FUTA calculation.

The system calculates FUTA as a deduction (FUTA) using the formula TAX FM FUT. The system includes this deduction in net pay calculation. The calculations are based on a variable that stores the tax rate for FUTA.

Year-to-date FUTA for a payee is stored in the FUTA_YTDA accumulator. The system then refers to this accumulator to enforce the yearly FUTA limit during calculation.