FUTA
Federal unemployment tax. The employer pays it on the first $7,000 of each employee's wages, usually 0.6% after the state credit.
FUTA, the Federal Unemployment Tax Act, pays for federal unemployment programs. Only the employer pays. Nothing comes out of the employee's check.
The rate in IRS Topic 759 is 6.0% on each employee's first $7,000 of wages. Pay your state unemployment tax on time and you get a credit of up to 5.4%. You're left with 0.6%: $42 per employee a year.
A state that owes money to the federal unemployment fund loses part of that credit. California's credit reduction for 2025 was 1.2%, so employers there paid 1.8%.
Form 940 reports FUTA once a year, due January 31 or the next business day. Publication 15 only asks for a deposit when a quarter's FUTA tops $500. One owner on salary never gets there in a quarter, so the tax just goes in with the return.
Take a salary from your S corp and FUTA applies to it. A sole proprietor has no wages, so there's no FUTA to pay.