NYS Department of Labor employer tax rate calculation - what factor determines unemployment insurance rates?
My small business just got our annual NYS Department of Labor unemployment insurance rate notice and I'm trying to understand how they calculate these rates. The rate seems higher than last year even though we didn't have many layoffs. What factor is the tax rate of an employer's unemployment insurance based on? Is it based on how many former employees filed claims against our account or something else? I'm confused about the whole experience rating system.
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Khalil Urso
The main factor is your company's experience rating, which is based on the unemployment benefits charged to your account over the past few years. If former employees filed UI claims and were approved, those benefit costs get charged back to your business account. The more claims charged to your account relative to your payroll, the higher your rate goes up. It's calculated using a formula that looks at your benefit ratio compared to other employers in your industry.
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Nasira Ibanez
•That makes sense. So if we had a couple employees who got laid off and collected unemployment, that would increase our rate for next year?
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Myles Regis
Yeah it's definitely the experience rating system. Your NYS Department of Labor rate depends on your claims history - basically how much your former employees have collected in benefits. New employers start at a standard rate but after a few years it adjusts based on your actual claims experience. You can check your account statement on the NYS Department of Labor employer portal to see exactly which claims were charged to your account.
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Brian Downey
•I had no idea employers could see which specific claims were charged to them. Is there a way to dispute charges if you think they're wrong?
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Myles Regis
•Yes, you can protest benefit charges within 15 days of getting the notice if you believe the separation wasn't eligible for benefits. Like if someone quit without good cause but still got approved.
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Jacinda Yu
ugh the whole system is so confusing... my rate went up even though we barely had any turnover! apparently even seasonal layoffs count against you which seems unfair for businesses that naturally have seasonal patterns
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Khalil Urso
•Seasonal businesses can sometimes get special considerations, but you need to register as a seasonal employer with NYS Department of Labor ahead of time. It doesn't automatically adjust after the fact.
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Landon Flounder
I was struggling to get through to NYS Department of Labor to understand my rate calculation and someone recommended using Claimyr at claimyr.com to help get connected to an agent. They have this demo video at https://youtu.be/qyftW-mnTNI that shows how it works. Ended up getting through to someone who explained the whole experience rating formula in detail. Much easier than trying to call directly and getting busy signals.
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Nasira Ibanez
•Thanks for the tip! I've been trying to call for weeks to get clarification on some charges that don't look right.
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Callum Savage
The experience rating takes into account 3 years of data typically. So claims from 2022, 2023, and 2024 would affect your 2025 rate. Its not just about number of claims but total dollar amount of benefits paid out compared to your total payroll during that period.
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