What is the threshold for employers to start paying FUTA tax based on employee wages?

The threshold for employers to begin paying Federal Unemployment Tax Act (FUTA) tax based on employee wages is set at $1,500. This means that if an employer pays an employee more than this amount in a calendar quarter, they are required to pay FUTA taxes on the wages that exceed this limit. This tax is used to fund state workforce agencies and provide unemployment benefits to those who lose their jobs. Understanding this threshold is essential for employers in managing payroll taxes and ensuring compliance with federal regulations.