How much does employer pay for unemployment benefits in NYS - trying to understand the costs

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.

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.

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.

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.

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.

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.

The NYS Department of Labor publishes industry rate schedules but they're not super easy to find on their website. Your best bet is to call their employer services line directly - they can tell you the starting rate for your specific NAICS code over the phone. When I was planning my business budget, I also reached out to other business owners in my industry through local business associations to get real-world examples of what they were paying. Most were pretty open about sharing their experience once I explained I was just starting out. Also worth noting that if you're planning to use contractors vs employees, that completely changes the unemployment insurance picture since you typically don't pay UI on 1099 contractors.