What is State Unemployment Tax?

SUTA stands for the State Unemployment Tax Act. It is required of all employers to pay this payroll tax. On behalf of their employees, the money is deposited into the state unemployment fund. When people speak to receiving unemployment benefits, they are referring to payments they receive from SUTA funds after losing their jobs. To provide unemployment benefits to relocated workers, SUTA was established. States spend money to provide unemployed workers with unemployment insurance payouts.