How much does employer pay for unemployment benefits in NYS - trying to understand the costs
I'm starting a small business in New York and need to understand what I'll be paying into the unemployment system. I know employers fund unemployment benefits but I can't find clear info on the actual rates. Does anyone know how much employers pay for unemployment insurance per employee? Is it a percentage of wages or a flat fee? Also wondering if new businesses pay different rates than established ones. Any business owners here who can break this down?
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Connor Richards
NYS unemployment insurance rates vary by employer experience rating. New employers typically start around 4.1% of taxable wages (first $12,000 per employee in 2025). Your rate can go up or down based on how many former employees file claims. Companies with few claims pay less, those with many claims pay more - it's called experience rating.
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Zoe Wang
•So if I have 5 employees making $50k each, I'd pay 4.1% on the first $12k of each salary? That's about $2,460 total per year?
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Grace Durand
There's also the reemployment services fund fee which is 0.075% of taxable wages. Plus administrative costs. The NYS Department of Labor sends you a rate notice each year with your specific percentage. Mine started at 4.1% as a new employer but dropped to 2.3% after three years with no claims.
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Steven Adams
•wait so employers actually pay different amounts? I thought it was the same rate for everyone
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Grace Durand
•Nope, it's based on your claims history. High turnover businesses pay way more than stable employers.
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Alice Fleming
My accountant handles all this but I remember the rate going up when we had layoffs during the recession. Went from like 3% to almost 7%. Really hurts when you're already struggling financially. The NYS Department of Labor doesn't mess around with collecting either - they'll garnish your accounts if you fall behind.
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Zoe Wang
•Yikes, 7%? That's a huge jump. How long did it take to get back to a lower rate?
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Hassan Khoury
Been running a restaurant for 8 years and our rate fluctuates between 3.5-5.2% depending on seasonal layoffs. The taxable wage base increases every year too - used to be like $10k now it's $12k. Just factor in about 4-5% of your first $12k per employee for budgeting purposes.
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Victoria Stark
If you're having trouble getting through to NYS Department of Labor for rate questions, I used claimyr.com recently when I couldn't reach anyone about our quarterly filings. They got me connected to an actual agent in like 10 minutes instead of waiting on hold forever. There's a video demo at https://youtu.be/qyftW-mnTNI showing how it works. Worth it when you need real answers fast.
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Zoe Wang
•Thanks, bookmarking that. The NYS Department of Labor phone system is impossible to navigate.
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Avery Flores
Just went through this process last year when I started my consulting firm. The initial rate for new employers is actually set by your industry classification (NAICS code) - some industries start higher than others due to historical claim patterns. Construction and restaurants typically start around 5-6% while professional services might start at 3-4%. You'll get your official rate assignment after your first few quarters of reporting. Also heads up - you have to register within 10 days of hiring your first employee or you face penalties. The online registration through the NYS Department of Labor website is pretty straightforward once you have your EIN.
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Morita Montoya
•That's really helpful about the industry classification affecting the starting rate! I hadn't considered that different types of businesses would have different baselines. Do you know if there's a way to look up what rate your specific NAICS code starts at before you actually register? Would be good for budgeting purposes.
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