NYS Department of Labor unemployment tax - who has to pay unemployment tax and how much?
I'm trying to understand the unemployment tax system in New York. I know employees get unemployment benefits when they lose their jobs, but I'm confused about who actually pays into the system. Is it employers, employees, or both? I'm starting a small business and need to know what my obligations are for unemployment tax payments to NYS Department of Labor. Also wondering if there are different rates for different types of businesses?
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StardustSeeker
In New York, employers pay unemployment insurance tax, not employees. You'll pay both state unemployment tax (SUTA) to NYS Department of Labor and federal unemployment tax (FUTA). The NY state rate varies based on your experience rating - new employers typically start around 4.1% on the first $12,300 of each employee's wages in 2025. You'll register through the NYS Department of Labor employer services portal.
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Keisha Taylor
•Thanks! So employees don't pay anything out of their paychecks for unemployment? That's different than I thought.
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Paolo Marino
yeah employers pay it all, been running my shop for 8 years and the rates can change yearly based on how many claims your former employees file
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Amina Bah
Correct - employees in NY don't contribute to unemployment insurance through payroll deductions. As a new employer, you'll also need to understand that your unemployment tax rate will be adjusted over time based on your 'experience rating' - essentially how many former employees file claims. Keep good records of separations and be prepared to respond to NYS Department of Labor requests for information when claims are filed.
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Keisha Taylor
•What kind of information does NYS Department of Labor typically request when someone files a claim?
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Amina Bah
•They'll usually want details about the separation - was it voluntary quit, discharge for misconduct, layoff due to lack of work, etc. You'll get a form asking for dates of employment, reason for separation, and any relevant documentation.
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Oliver Becker
I had trouble getting through to NYS Department of Labor when I needed to report wage information for a former employee's claim. Spent hours on hold trying to reach someone. Finally used this service called Claimyr (claimyr.com) that connects you directly to unemployment agents by phone. They have a demo video at https://youtu.be/qyftW-mnTNI showing how it works. Made the whole process so much easier than trying to call the regular number.
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Natasha Petrova
•Never heard of that service but honestly anything is better than sitting on hold for 3+ hours with NYS Department of Labor
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Javier Hernandez
Don't forget you also have to pay into the disability benefits fund if you have employees in NY - that's separate from unemployment tax but also required
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Ethan Anderson
•Good point about disability benefits! @Javier Hernandez is that also paid entirely by employers or do employees contribute to that one? I want to make sure I understand all the required payroll taxes before I hire my first employee.
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