How much does an employer pay for unemployment benefits to NYS Department of Labor?
I'm trying to understand the employer side of unemployment insurance. My company just had to lay off several people and I'm wondering what we're actually paying into the NYS Department of Labor system. Does anyone know how much employers pay per employee for UI coverage? Is it a percentage of wages or a flat rate? I want to make sure we're budgeting correctly for future quarters.
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Sofia Ramirez
New York employers pay UI taxes based on their experience rating and payroll. The base rate ranges from 0.6% to 9.9% of taxable wages, which is currently the first $12,300 of each employee's annual wages. Your specific rate depends on your company's claims history - fewer claims means lower rates.
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Dylan Cooper
•So if we've never had claims before, we'd be at the lower end? That's helpful to know for planning.
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Dmitry Volkov
There's also the State Unemployment Tax (SUT) and you might have additional assessments. New employers typically start at 4.1% rate until they build up enough history for NYS Department of Labor to calculate an experience rating. The rate gets adjusted annually based on your account.
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StarSeeker
•Yeah my small business started at that 4.1% rate. Took about 3 years before it dropped to 2.8% since we hadn't had any claims.
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Ava Martinez
Don't forget about the federal unemployment tax too - that's separate from what you pay to NYS Department of Labor. It's like 0.6% on the first $7,000 of wages per employee if you're current on your state taxes.
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Dylan Cooper
•Ugh so many different taxes to track. Do you know if there's a good resource that breaks all this down clearly?
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Dmitry Volkov
•The NYS Department of Labor website has employer handbooks that explain all the rates and calculations. Worth downloading if you're handling payroll.
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Miguel Ortiz
Be prepared for your rate to go up after those layoffs. The experience rating system means companies that have more claims pay higher rates in future years. It's not immediate but it'll hit your renewal.
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Dylan Cooper
•How much of an increase are we talking about? This was our first layoff ever due to losing a major contract.
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Sofia Ramirez
•The increase depends on the total benefit charges against your account compared to your total payroll. For a first-time situation it might only bump you up 0.5-1% but every case is different.
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