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Update Your Unemployment Tax Rate

This article explains how to keep your payroll tax records accurate by updating Federal and State unemployment tax rates in Zenoti Integrated Payroll (ZIP), including how to set rates for the upcoming year without affecting your current payroll.

Overview

Unemployment tax rates, such as FUTA (Federal Unemployment Tax Act) and SUTA (State Unemployment Tax Act), are assigned to your business by federal and state agencies. When these rates change, you'll need to update them in ZIP to ensure accurate payroll calculations.

Note

If your business receives a notification of a balance due related to unemployment taxes, use this section to review and confirm that your unemployment rate is accurate in the system.

Before you begin:

  • ZIP supports year-specific tax rates. Each rate is tied to a calendar year.

  • If your new rate applies to next year, use the Input additional value option - do not overwrite the current year's rate.

  • Mid-year corrections to the current year's rate are allowed when needed.

Steps to update your unemployment tax rate

Follow these steps:

  1. Navigate to Tax Settings,

    1. Go to Employees > Zenoti Integrated Payroll (ZIP).

    2. In the right-side menu, click Settings.

    3. Click Review Setup next to the business entity you want to update.

    4. Scroll to the Tax Setup section.

  2. Open the Tax Rate field.

    1. Click on the relevant Federal or State tax type (example, FUTA, SUTA, or your state's equivalent).

    2. Locate the Unemployment Tax Rate field (or similar, depending on the tax type).

  3. Update the Tax Rate.

    Choose the scenario that applies to you:

    Scenario A: Setting the rate for next year

    Use this option when your new rate takes effect on January 1 of the coming year.

    • Do not edit the existing rate field - this would alter your current year's payroll.

    • Instead, click Input additional value to add a new entry for the upcoming year.

    • Enter the new tax rate and confirm the applicable year.

    • Save your changes. ZIP will automatically apply this rate starting in the new year.

    Scenario B: Correcting the rate mid-year

    Use this option when you need to correct an incorrect rate for the current year.

    • The year field cannot be changed mid-year, but the tax rate value itself can be updated.

    • Click directly on the current year's Unemployment Tax Rate field and enter the corrected value.

    • Save your changes. The updated rate will apply to all future pay runs in this calendar year.

Frequently asked questions (FAQs)

Q. Where do I find my unemployment tax rate? 

A. Your FUTA rate is set by the IRS (typically 6%, reduced to 0.6% with the maximum state tax credit). Your state's SUTA rate is assigned annually by your state workforce agency. Check your annual tax rate notice or contact your state agency directly.

Q. Can I enter a rate for multiple upcoming years at once? 

A. Yes. You can add multiple future-year entries using "Input additional value" for each year. Each entry will activate automatically when the corresponding year begins.

Q. What happens if I accidentally overwrite my current year's rate? 

A. Update the rate back to the correct value immediately, then review any affected pay runs. If payroll has already been processed with the incorrect rate, contact Zenoti Support to assess whether a correction or reversal is needed.

Q. Do these changes affect pay runs already processed? 

A. No. Changes to tax rates in ZIP apply only to future pay runs. Already-processed payroll is not retroactively recalculated.

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