When must federal unemployment tax be calculated?

Federal unemployment tax must be calculated quarterly based on taxable wages. This is because the Federal Unemployment Tax Act (FUTA) requires employers to report and pay unemployment taxes on a quarterly basis, allowing for the precise assessment of the unemployment tax burden as it relates to wages paid. Employers are obligated to track their taxable wages for the quarter to compute the appropriate tax liability, ensuring they meet their financial responsibilities under federal law.

This approach allows for timely adjustments and contributions, supporting the unemployment insurance program and helping to avoid penalties for non-compliance. The need for quarterly calculation aligns with the broader requirements for payroll reporting and tax management, ensuring that businesses maintain accurate financial records throughout the year.