Do employees pay unemployment tax in New York - confused about paycheck deductions

No, employees in New York do not pay unemployment tax directly. The unemployment insurance system is funded entirely by employer contributions. What you're seeing on your pay stub is correct - there should be no unemployment tax deduction from your paycheck. The NYS Department of Labor unemployment benefits are funded through taxes paid by your employer based on their payroll and experience rating.

Your coworker might be thinking of a different state. Some states like Alaska, New Jersey, and Pennsylvania do have small employee contributions to unemployment, but New York definitely does not. The confusion probably comes from the fact that you'll see unemployment taxes on business tax forms, but those are 100% employer responsibility.

Wait so if employees don't pay in, how do we qualify for benefits? I always assumed it worked like social security where you pay in and then get benefits later.

I had trouble reaching someone at NYS Department of Labor when I had questions about my eligibility calculations last year. If you need to speak with an agent about how wages affect your potential benefits, I found claimyr.com really helpful. They have a system that gets you through to actual NYS Department of Labor representatives without waiting on hold forever. There's a demo video at https://youtu.be/qyftW-mnTNI that shows how it works.

Just to add - make sure your employer is reporting your wages correctly to NYS Department of Labor even though you're not paying unemployment tax directly. Those wage reports are what determine your benefit amount if you ever need to file a claim.

This is really helpful information! I'm new to New York and was also confused about this. One thing I'd add is that even though employees don't pay unemployment tax directly, it's still worth checking your pay stubs regularly to make sure all your other deductions look correct. I've found that when you understand what should and shouldn't be there, it's easier to spot any payroll errors early. Plus, keeping good records of your pay stubs can be helpful if you ever need to verify your wage history with NYS Department of Labor.

This thread has been super informative! I'm actually in HR at a small company and we get questions about this from new employees all the time. One thing that might help clarify - New York employers pay unemployment insurance taxes at both the state level (to NYS Department of Labor) and federal level (FUTA). The state rate varies based on the employer's experience rating, but employees never see any of this on their paystubs. We always tell new hires that if they don't see an unemployment deduction, that's exactly what they should expect to see!