How does employer pay unemployment taxes to NYS Department of Labor - confused about the process
I'm starting a small business in NY and trying to understand how the unemployment tax system works. Do I pay unemployment taxes directly to the NYS Department of Labor or is it through another agency? I've read about SUTA and FUTA but I'm getting confused about who collects what and when. My accountant mentioned quarterly payments but didn't explain the specifics. Can someone break down how employer unemployment contributions actually work in New York?
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Zara Mirza
You'll pay state unemployment taxes (SUTA) directly to the NYS Department of Labor and federal unemployment taxes (FUTA) to the IRS. In NY, new employers start at a standard rate of 4.1% on the first $12,300 of each employee's wages for 2025. You'll file quarterly reports using form NYS-45 and pay through the NYS Department of Labor's online system. FUTA is 6% but you get a credit that brings it down to 0.6% if you pay your state taxes on time.
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Sean Kelly
•Thanks! So the NYS Department of Labor handles the state portion and IRS handles federal. Is there a minimum number of employees I need before I have to start paying?
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Luca Russo
You need to register with NYS Department of Labor as soon as you have employees, even just one part-time worker. The rate can change based on your experience - companies with fewer claims get lower rates over time. I started at 4.1% but after three years with no claims I'm down to 2.3%. Make sure you keep good records because if employees file claims your rate will go up.
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Nia Harris
•wait so if someone files unemployment against my company my rate increases? that seems unfair if they quit
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Luca Russo
•Only if they're approved for benefits. If someone quits without good cause they won't get approved and it won't affect your rate. But if you fire someone or lay them off, that will count against you.
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GalaxyGazer
I had SO much trouble setting up my employer account with the NYS Department of Labor last year. Their website kept timing out when I tried to register and when I called I was on hold for literally 2 hours. Is there a better way to get through to them? I eventually got it sorted but it was a nightmare.
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Mateo Sanchez
•I used Claimyr (claimyr.com) to get through to NYS Department of Labor when I couldn't reach them about my employer registration issues. They have this video demo (https://youtu.be/qyftW-mnTNI) that shows how it works. Basically they handle getting you connected to an actual agent instead of sitting on hold forever. Worked great for me - got through same day.
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GalaxyGazer
•Never heard of that but might try it if I have issues again. The whole system seems designed to frustrate you into giving up.
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Aisha Mahmood
just pay the taxes its not that hard lol. i've been doing payroll for 15 years and employers always overthink this stuff
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Sean Kelly
•Easy for you to say after 15 years! When you're new to running a business every tax feels complicated.
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Ethan Moore
One thing to watch out for - make sure you're classifying workers correctly as employees vs contractors. I got audited by NYS Department of Labor because they thought I was misclassifying people to avoid paying unemployment taxes. Cost me way more in penalties than I would have paid in the first place. When in doubt, classify them as employees.
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