Do I have to pay federal unemployment tax as an employee in New York?
I'm looking at my pay stub and trying to understand all the deductions. I see state taxes, federal taxes, social security, but I'm confused about unemployment taxes. Do I as an employee have to pay federal unemployment tax? My coworker said only employers pay FUTA but I want to make sure I'm understanding this correctly since I'm planning my budget for next year.
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Sean O'Brien
No, you don't pay federal unemployment tax as an employee. FUTA (Federal Unemployment Tax Act) is paid only by employers. As an employee, you don't have any federal unemployment tax deducted from your paycheck. However, in New York, you do pay state unemployment insurance tax which shows up as a small deduction on your pay stub.
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Anastasia Smirnova
•Thank you! That makes sense. I was getting confused because I do see the NY state unemployment deduction but couldn't find anything about federal on my stub.
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Zara Shah
your coworker is right - only employers pay the federal unemployment tax. its like 6% on the first $7000 of wages for each employee but we dont see that cause its not taken from our checks
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Luca Bianchi
•Actually it's 6.0% but employers can get a credit of up to 5.4% if they pay their state unemployment taxes on time, so the effective rate is usually 0.6%. But you're correct that employees don't pay this.
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GalacticGuardian
I was confused about this too when I first started working! The only unemployment-related tax you pay as an employee in NY is the state unemployment insurance tax. It's a tiny amount - like 0.5% of your wages up to a certain limit. The federal unemployment tax (FUTA) is completely on the employer side.
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Nia Harris
wait so if i ever need to file for unemployment through NYS Department of Labor, the benefits come from both what my employer paid in federal taxes AND what i paid in state taxes??
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Sean O'Brien
•Good question! When you file for unemployment benefits with NYS Department of Labor, the funding actually comes from both federal and state sources, but it's all employer-paid. Your state UI contributions help fund the state portion, and the federal FUTA taxes help fund extended benefits and administrative costs.
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Mateo Gonzalez
Just to add - if you're ever dealing with NYS Department of Labor and need to actually talk to someone about your claim status or benefits, I had success using claimyr.com to get through their phone lines. They have a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. Way easier than trying to call myself and getting disconnected constantly.
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Anastasia Smirnova
•Good to know for the future! Hopefully I won't need unemployment benefits but it's helpful to know there are ways to actually reach someone if needed.
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Zara Malik
This is really helpful info! I just started my first job and was also confused about all the tax deductions. So just to confirm - the only unemployment-related deduction I should see on my NY paystub is the state unemployment insurance (SUI), and that's usually a pretty small amount? I want to make sure I'm not missing anything when I review my pay stub.
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