Does unemployment come out of your paycheck - confused about NYS Department of Labor contributions
I just started my first real job after college and I'm looking at my paystub trying to figure out all these deductions. I see social security, medicare, state tax, federal tax... but I don't see anything specifically for unemployment insurance. My coworker told me that unemployment benefits come from money taken out of our paychecks but I can't find it anywhere on my stub. Does unemployment come out of your paycheck in NY? How does the NYS Department of Labor get funded for all these claims? I'm so confused about how this whole system works.
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Edwards Hugo
Actually, unemployment insurance in New York works differently than you might think. As an employee, you DON'T pay into the unemployment system directly through paycheck deductions. Your employer pays unemployment insurance taxes to fund the NYS Department of Labor system. There are two parts: State Unemployment Tax (SUTA) and Federal Unemployment Tax (FUTA), but both are paid entirely by employers, not employees. The only exception is in a few states that do deduct from employee paychecks, but New York isn't one of them.
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Dylan Fisher
•Oh wow, so my employer is paying for this? That's actually really good to know. I was worried I was missing some deduction or something.
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Gianna Scott
yeah your employer pays it all in NY. i think the rate is like 4% or something of your wages but its all on them not you
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Alfredo Lugo
Your coworker might be thinking of disability insurance, which IS deducted from your paycheck in New York. You should see SDI (State Disability Insurance) on your paystub - that's about 0.5% of your wages. But unemployment insurance? Nope, that's 100% employer-funded. The NYS Department of Labor uses those employer contributions to pay out benefits when people file claims. The whole system is designed so workers don't have to pay in directly.
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Dylan Fisher
•Ah yes I do see SDI on my stub! That makes so much more sense now. Thanks for clearing that up.
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Sydney Torres
Wait this is confusing me too because I swear my dad always said he paid into unemployment through his job. Maybe he was talking about a different state? Or maybe things changed over the years?
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Edwards Hugo
•Your dad might have worked in Alaska, New Jersey, or Pennsylvania - those are the only three states where employees actually pay unemployment taxes through payroll deductions. Most people assume they pay into it because they pay into Social Security and Medicare, but unemployment is different.
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Kaitlyn Jenkins
This whole system is so backwards if you ask me. Employers pay the taxes but then they fight tooth and nail when you try to claim benefits. I've been dealing with the NYS Department of Labor for months trying to get my claim approved and my former employer keeps challenging everything. If they're the ones funding it you'd think they'd want the system to work properly!!
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Caleb Bell
•I feel you on the employer challenges. Mine contested my claim even though they laid me off! The whole process took forever.
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Alfredo Lugo
Speaking of dealing with the NYS Department of Labor, if you ever need to actually contact them about a claim, I had good luck using Claimyr (claimyr.com). They help you get through to an actual agent instead of being stuck in phone tree hell. There's a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. Way better than spending hours trying to call yourself.
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Sydney Torres
•Never heard of that before but might be worth looking into. The NYS Department of Labor phone system is absolutely terrible.
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Natasha Volkova
Just to add some context for OP - the employer unemployment tax rates in NY actually vary based on the employer's "experience rating." New employers start at around 4.1%, but companies with fewer layoffs can get rates as low as 0.6%, while those with lots of claims can pay up to 9.9%. So employers do have financial incentive to minimize unemployment claims, which is why some fight legitimate claims. It's a balancing act - the system needs to be funded but also fair to workers who genuinely need benefits.
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Juan Moreno
•That's really helpful context! I had no idea that employers could get different rates based on how many claims they have. That actually explains a lot about why some companies might be so resistant to legitimate claims - they're literally trying to keep their rates low. It's kind of messed up that the system creates this incentive for employers to fight against their own former employees who are just trying to get benefits they're entitled to.
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Yara Campbell
@Dylan Fisher - I was in the same boat when I started my first job! It's really confusing because we're so used to seeing all these deductions that you naturally assume unemployment would be one of them. The key thing to remember is that unemployment insurance is essentially insurance that your employer buys to protect their workforce - kind of like how they might provide health insurance or workers' comp. The NYS Department of Labor collects these employer contributions and uses them to fund the whole unemployment benefits system. So when you or a coworker eventually needs to file a claim, those benefits are coming from a pool of money that employers across the state have been paying into, not from your individual contributions.
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