NYS Department of Labor unemployment tax rates - how much is unemployment tax for employers?
I'm starting a small business in NY and trying to figure out budget for payroll taxes. Does anyone know the current unemployment tax rates that employers have to pay to NYS Department of Labor? I've been looking at their website but it's confusing with all the different rate schedules. My accountant mentioned something about experience ratings but I'm not sure what that means for a new employer. Any business owners here who can break this down?
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Ally Tailer
For new employers in NY, you'll start with the standard new employer rate which is currently 4.1% on the first $12,300 of each employee's wages. So maximum annual UI tax per employee would be around $504. After a few years you'll get an experience rating based on how many unemployment claims your former employees file.
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Callum Savage
•That's higher than I expected! Is there any way to get a lower rate as a new business?
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Aliyah Debovski
The wage base changes every year too - that $12,300 figure goes up annually. Plus you have to factor in the reemployment service fund which adds another small percentage. NYS Department of Labor sends out rate notices each year but for planning purposes budget around 4-5% of your first $13k per employee.
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Miranda Singer
•wait so if I have 10 employees making $50k each I'm only paying UI tax on the first $12,300 of each salary? that actually doesn't sound too bad
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Cass Green
Been running my business for 8 years now and my rate has fluctuated between 2.5% and 5.8% depending on turnover. If you can keep employees happy and avoid layoffs your experience rating improves over time. But yeah, new employers get stuck with that higher standard rate until you build up some history with NYS Department of Labor.
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Finley Garrett
Don't forget about the administrative assessment fee and other smaller fees that get tacked on! It's not just the basic UI rate. I was surprised my first year when the total was higher than what I calculated just using the 4.1% rate.
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Ally Tailer
•Good point - there's also the employment administration fund assessment which is a small additional percentage. NYS Department of Labor breaks it all down on their quarterly reports but it can add up.
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CyberSiren
Just went through this process last year when I started my consulting firm. One thing that really helped was calling the NYS Department of Labor directly - their employer services team walked me through the rate calculation and explained how the experience rating system works. They also sent me a packet with all the current rates and fee schedules. The phone wait was long but definitely worth it for getting clarity on exactly what I'd owe each quarter.
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Aria Washington
•That's really helpful advice about calling them directly! I've been dreading dealing with government phone systems but if they actually walk you through the calculations it might be worth the wait time. Did they also explain how often the rates can change or when you find out your new experience rating? I'm trying to plan my cash flow for the next few years.
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