What is my unemployment tax rate - NYS Department of Labor employer contributions?
I'm trying to figure out what my unemployment tax rate is as a small business owner in NY. I've been paying into the system for about 2 years now but I'm getting different numbers from my payroll company and what I think I should be paying. Does anyone know how NYS Department of Labor calculates the UI tax rate for employers? I have 3 employees and no claims against my account so far. My payroll service says I'm at 4.1% but that seems really high compared to what other business owners have told me.
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Emily Parker
Your UI tax rate depends on several factors including your experience rating, industry classification, and how long you've been in business. New employers typically start at a standard rate around 4.1% which matches what your payroll company quoted. After you've been paying into the system for a few years, NYS Department of Labor will calculate your experience rating based on claims filed against your account. Since you mentioned no claims in 2 years, your rate should decrease when they recalculate it.
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Justin Evans
•That makes sense! When do they typically recalculate the rates? Is it automatic or do I need to request it?
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Ezra Collins
yeah the new employer rate is definitely around 4% - I started my landscaping business 3 years ago and was paying 4.1% the first couple years too. Now I'm down to like 2.8% since none of my guys have filed claims.
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Victoria Scott
•The recalculation happens automatically each year, usually around January. NYS Department of Labor sends out new rate notices to all employers. You don't need to request it, but you should definitely keep track of your rate changes and make sure your payroll company updates it correctly.
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Benjamin Johnson
I've been dealing with payroll tax issues for months and honestly the best thing I did was use claimyr.com to actually get through to someone at NYS Department of Labor who could explain my specific situation. They have a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. Way easier than trying to call and getting hung up on constantly. The agent was able to pull up my exact account and explain how my rate was calculated.
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Justin Evans
•Interesting, I might need to try that if I can't get clarity from my payroll company. The phone system at NYS Department of Labor is impossible to navigate.
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Zara Perez
Just to add - your rate also depends on your NAICS code (industry classification). Construction and seasonal businesses tend to have higher base rates than office-based businesses. Make sure your payroll company has the right industry code for your business because that affects your starting rate calculation.
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Keisha Williams
The 4.1% rate your payroll company quoted sounds correct for a newer employer. New York uses what's called a "standard rate" for businesses that haven't been operating long enough to establish an experience rating. After about 3-4 years of paying into the system with no claims, you should see that rate drop significantly - I've seen rates go as low as 0.3% for businesses with clean records. Just make sure your payroll company updates your rate when you get your annual notice from NYS DOL, because some don't automatically adjust it and you could end up overpaying.
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