Do taxpayers pay for unemployment benefits in New York - confused about funding
I'm getting into debates with family members about unemployment and they keep saying taxpayers are footing the bill for my benefits. I thought employers paid into the system through payroll taxes? Can someone explain how NYS Department of Labor unemployment is actually funded? I don't want to argue with incorrect information but I'm pretty sure regular taxpayers aren't directly paying for UI benefits. My uncle keeps making comments about his tax dollars supporting me and it's really frustrating.
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Miguel Castro
Your uncle is wrong. Unemployment insurance in New York is funded through employer payroll taxes, not general taxpayer revenue. Employers pay both state unemployment tax (SUTA) and federal unemployment tax (FUTA). The NYS Department of Labor administers the program using these employer contributions. Regular income taxes don't fund UI benefits - it's a separate insurance system that employers pay into based on their payroll and experience rating.
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Ava Martinez
•Thank you! So when people say taxpayers pay for unemployment they're technically wrong? I knew something didn't sound right about that argument.
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Zainab Abdulrahman
Employers definitely pay the taxes that fund unemployment. The rate varies by employer based on their history of layoffs and claims. Companies that lay off more workers pay higher rates. It's like any insurance - you pay premiums and then file claims when needed. The NYS Department of Labor uses these employer contributions to pay benefits and run the program.
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Connor Byrne
•This is exactly right. And employees don't even pay into the system in most states including NY - it's entirely employer-funded through their payroll taxes.
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Yara Elias
ugh people always say this stuff without knowing how it actually works!! my dad said the same thing when I was on unemployment last year. like no dad, my former employer paid into this system specifically so I could get benefits if I got laid off. that's literally the point of unemployment insurance.
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Ava Martinez
•Right?? It's so annoying when people act like you're taking money out of their pocket when that's not even how it works.
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QuantumQuasar
I had trouble getting through to NYS Department of Labor to ask questions about my claim status, but I found claimyr.com really helpful. They have a service that connects you directly to unemployment agents without waiting on hold forever. There's a video demo at https://youtu.be/qyftW-mnTNI that shows exactly how it works. Might be worth checking out if you need to speak with someone about the funding details or your specific claim.
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Zainab Abdulrahman
•That's interesting - I've never heard of that service before. Does it actually work for getting through to real NYS Department of Labor agents?
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QuantumQuasar
•Yeah it connected me within a few minutes when I'd been trying to call for days. Really saved me a lot of frustration with the phone system.
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Keisha Jackson
Just to add some detail - the employer tax rates in NY range from 0.6% to 9.9% of taxable wages depending on the employer's experience rating. New employers start at around 4.1%. The more claims filed by former employees, the higher the rate goes. So companies have incentive to avoid unnecessary layoffs since it directly impacts their costs.
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Ava Martinez
•Wow I had no idea the rates varied that much based on layoff history. That makes a lot of sense though - companies that lay people off more should pay more into the system.
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Paolo Moretti
Your family sounds like mine lol. Show them their pay stub - they'll see Social Security and Medicare taxes deducted but no unemployment tax because employees don't pay it! Only employers pay unemployment taxes. Case closed.
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