Employers must pay the federal unemployment (FUTA) tax based on wages paid to their employees. Unlike FICA taxes, only employers, and not employees, are liable for FUTA tax. Since 1988, employers have been paying a 0.2% surtax for FUTA. The surtax is part of the 6.2% gross unemployment tax rate that employers pay on the first $7,000 of wages paid annually to each employee (6.0% permanent tax rate, 0.2% temporary surtax). Effective July 1, 2011, the 0.2% FUTA surtax will expire unless Congress takes action.